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THE DOCTRINE OF STATE
IMMUNITY
IS STATE IMMUNITY CONSTITUTIIONAL IN
ORIGIN?
No. Because according to Justice
Holmes “ there can be no legal right
against the authority which makes
the law on which the right
depends”.
WHAT IS YOUR CONSTITUTIONAL BASIS?
-
WHAT IS STATE IMMUNITY?
Basis:
Legal ---- Justice Holmes-( grounded on
sovereignty
Sociological --- State’s time (Providence case)
Constitution- affirmation
C. State Immunity from Suit. “The State
cannot be sued without its consent” [Sec. 3,
Art. XVI].
1. Basis: There can be no legal right against
the authority which makes the law on
which the right depends [Republic v.
Villasor, 54 SCRA 83], However, it may be
sued if it gives consent, whether express
or implied. The doctrine is also known as
the Royal Prerogative of Dishonesty.
2. Immunity is enjoyed by other States,
consonant with the public international law
principle of par in parem non habet imperium.
The Head of State, who is deemed the
personification of the State, is inviolable, and
thus, enjoys immunity from suit.
a) The State’s diplomatic agents, including
consuls to a certain extent, are also exempt
from the jurisdiction of local courts and
administrative tribunals. [See PUBLIC
INTERNATIONAL LAW, infra.].
-
Section 3, Article XVI of the 1987
Philippine Constitution.
WHAT IS YOUR SOCIOLOGICAL BASIS?
-
The propensity of the people to
litigate; waste of time, money, and
resources.
SANDERS VS VERIDANIO II
162 SCRA 88 (June 10, 1988) GR –L46930
CASE DOCTRINE: ACTS COMMITTED BY
THE OFFICERS IN THEIR OFFICIAL
CAPACITY ARE COVERED BY STATE
IMMUNITY. - It is stressed at the outset that
the mere allegation that a government
functionary is being sued in his personal
capacity will not automatically remove him
from the protection of the law of public
officers and, if appropriate, the doctrine of
state immunity. By the same token, the mere
invocation of official character will not suffice
to insulate him from suability and liability for
an act imputed to him as a personal tort
committed without or in excess of his
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authority. These well-settled principles are
applicable not only to the officers of the local
state but also where the person sued in its
courts pertains to the government of a foreign
state, as in the present case.
It is abundantly clear in the present case that
the acts for which the petitioners are being
called to account were performed by them in
the discharge of their official duties. Sanders,
as director of the special services department
of NAVSTA, undoubtedly had supervision
over its personnel, including the private
respondents, and had a hand in their
employment, work assignments, discipline,
dismissal and other related matters. It is not
disputed that the letter written was in fact a
reply to a request from his superior, the other
petitioner, for more information regarding
the case of the private respondents. Moreover,
even in the absence of such request, he still
was within his rights in reacting to the
hearing officer's criticism — in effect a direct
attack against him — that Special Services
was practicing "an autocratic form of
supervision."
As for Moreau, what he is claimed to have
done was write the Chief of Naval Personnel
for concurrence with the conversion of the
private respondents' type of employment
even before the grievance proceedings had
even commenced. Disregarding for the nonce
the question of its timeliness, this act is
clearly official in nature, performed by
Moreau as the immediate superior of Sanders
and directly answerable to Naval Personnel in
matters involving the special services
department of NAVSTA. In fact, the letter
dealt with the financial and budgetary
problems of the department and contained
recommendations for their solution, including
the re- designation of the private respondents.
There was nothing personal or private about
it.
Given the official character of the abovedescribed letters, we have to conclude that
the petitioners were, legally speaking, being
sued as officers of the United States
government. As they have acted on behalf of
that government, and within the scope of
their authority, it is that government, and not
the petitioners personally, that is responsible
for their acts. Assuming that the trial can
proceed and it is proved that the claimants
have a right to the payment of damages, such
award will have to be satisfied not by the
petitioners in their personal capacities but by
the United States government as their
principal. This will require that government
to perform an affirmative act to satisfy the
judgment, viz., the appropriation of the
necessary amount to cover the damages
awarded, thus making the action a suit
against that government without its consent.
THE DOCTRINE OF STATE IMMUNITY
APPLIES TO FOREIGN STATES SUED IN
THIS JURISDICTION. - There should be no
question by now that such complaint cannot
prosper unless the government sought to be
held ultimately liable has given its consent to
be sued. So we have ruled not only in Baer but
in many other decisions where we upheld the
doctrine of state immunity as applicable not
only to our own government but also to
foreign states sought to be subjected to the
jurisdiction of our courts.
The practical justification for the doctrine, as
Holmes put it, is that "there can be no legal
right against the authority which makes the
law on which the right depends." In the case
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of foreign states, the rule is derived from the
principle of the sovereign equality of states
which wisely admonishes that par in parem
non habet imperium and that a contrary
attitude would "unduly vex the peace of
nations." Our adherence to this precept is
formally expressed in Article II, Section 2, of
our Constitution, where we reiterate from our
previous charters that the Philippines "adopts
the generally accepted principles of
international law as part of the law of the land.
Private Respondent’s status and requested
concurrence therewith.
par in parem non habet imperium (meaning,
an equal has no authority over an equal)
Private respondents filed suit for damages
claiming that the letter contained libelous
imputations, that had exposed them to
ridicule and ad caused them mental anguish,
and
prejudgment
of
the
grievance
proceedings was an invasion of their personal
and proprietary rights. They make it clear
that petitioners were being sued in their
personal capacity. A motion to dismiss on
the ground of lack of jurisdiction was filed by
the petitioner and was denied.
SANDERS VS VERIDIANO II
ISSUE:
FACTS:
Whether or not the petitioners are
performing their official duties when they did
the acts for which they are being sued for
damages.
Private Respondents Anthony Rose and Ralph
Wyers (deceased) were both employed as
game room attendants in the special services
department of the US Naval Station (NAVSTA).
They were advised that their employment
have been converted from permanent fulltime to permanent part-time. Their reaction
was to protect the conversion and to institute
grievance proceedings. The hearing officer
recommended the reinstatement of private
respondents to permanent full time status
plus back wages.
In a letter addressed to petitioner Moreau,
Commanding Officer of the Subic Naval Base,
Petitioner Sanders, Special Services Director
of
NAVSTA,
disagreed
with
the
recommendation and asked for its rejection.
Moreau, even before the start of the grievance
hearings, sent a letter to the chief of Naval
Personnel explaining the change of the
RULING:
YES. It is clear in the present case that the acts
for which the petitioners are being called to
account were performed by them in the
discharge of their official duties. Sanders, as
the Director of the Special Services
Department of NAVSTA, undoubtedly had
supervision over its personnel including
private respondents and had a hand in their
employment, work, assignment, discipline,
dismissal and other related matters. The act
of Moreau is deadly official in nature,
performed by him as the immediate superior
of Sanders and directly answerable to Naval
Personnel in matters involving special
department of NAVSTA.
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The case of Sanders vs Veridiano is the
exception to the general rule:
-
ce of official duties [Republic v.
Sandiganbayan, G.R. No. 142476,
March 20, 2001]. Likewise, in U.S. v.
Reyes, 219 SCRA 192, petitioner
Bradford, Activity Exchange Manager
at JUSMAG Headquarters, was held
personally liable, inasmuch as the
search of respondent Montoya at the
JUSMAG parking lot (which subjected
respondent to embarrassment) was
held to be beyond the scope and even
beyond
the Manager’s
official
functions.
-
Similarly, in Republic v. Hon. Edilberto
Sandoval, 220 SCRA 124, even as the
Supreme Court dismissed the suit
against the Republic of the Philippines,
the action for damages against the
military personnel and the policemen
responsible for the 1989 Mendiola
massacre was upheld, inasmuch as
the initial findings of the Davide
Commission (tasked by President
Aquino to investigate the incident)
showed that there was, at least,
negligence on their part when they
fired their guns.
-
Where the public official is sued in his
personal capacity, the doctrine of
state immunity will not apply, even if
the acts complained of were
committed while the public official
was occupying a'public position. In
Lansang v. Court of Appeals, G.R. No.
102667, February 23, 2000, the
petitioner was sued for allegedly
Exception to the General Rule
1. To enforce an act required by law
2. To restrain act claimed to be
unconstitutional
3. To compel payment of damages from an
already appropriated fund
4. To secure judgment where officer may
satisfy liability without state doing positive
act
5. When government violates own laws
because state immunity cannot be used to
perpetrate an injustice
-
The unauthorized acts of government
officials are not acts of state; thus, the
public officer may be sued and held
personally liable in damages for such
acts [Shauf v. Court of Appeals, 191
SCRA 713],
-
Where a public officer has committed
an ultra vires act, or where there is a
showing of bad faith, malice or gross
negligence, the officer can be held
personally accountable, even if such
acts are claimed to have been
performed in connection withofficial
duties [Wylie v. Rarang, 209 SCRA 357].
-
Thus, the PCGG or any of its members,
may be held civilly liable (for the sale
of an aircraft to Fuller Aircraft, which
was void) if they did not act with good
faith and within the scope of their
authority in the performan
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“personal motives” in ordering the
ejectment of the General Assembly of
the Blind, Inc. (GABI) from the Rizal
Park; thus, the case was not deemed a
suit against the State.
REPUBLIC VS. SANDOVAL
GR 84607 March 19, 1993
CASE DOCTRINE: CONCEPT OF STATE
IMMUNITY. - Under our Constitution the
principle of immunity of the government from
suit is expressly provided in Article XVI,
Section 3. The principle is based on the very
essence of sovereignty, and on the practical
ground that there can be no legal right as
against the authority that makes the law on
which the right depends. It also rests on
reasons of public policy — that public service
would be hindered, and the public
endangered, if the sovereign authority could
be subjected to law suits at the instance of
every citizen and consequently controlled in
the uses and dispositions of the means
required for the proper administration of the
government.
INSTANCES OF SUITS AGAINST THE STATE.
- Some instances when a suit against the State
is proper are:
1. (1) When the Republic is sued by name;
2. (2)
When the suit is against an
unincorporated government agency;
3. (3) When the suit is on its face against a
government officer but the case is
such that ultimate liability will belong
not to the officer but to the
government.
While the Republic in this case is sued by
name, the ultimate liability does not pertain
to the government. Although the military
officers and personnel, then party defendants,
were discharging their official functions when
the incident occurred, their functions ceased
to be official the moment they exceeded their
authority. Based on the Commission findings,
there was lack of justification by the
government forces in the use of firearms.
Moreover, the members of the police and
military crowd dispersal units committed a
prohibited act under B.P. Blg. 880 as there
was unnecessary firing by them in dispersing
the marchers.
While it is true that nothing is better settled
than the general rule that a sovereign state
and its political subdivisions cannot be sued
in the courts except when it has given its
consent, it cannot be invoked by both the
military officers to release them from any
liability, and by the heirs and victims to
demand
indemnification
from
the
government. The principle of state immunity
from suit does not apply, as in this case, when
the relief demanded by the suit requires no
affirmative official action on the part of the
State nor the affirmative discharge of any
obligation which belongs to the State in its
political capacity, even though the officers or
agents who are made defendants claim to
hold or act only by virtue of a title of the state
and as its agents and servants. This Court has
made it quite clear that even a "high position
in the government does not confer a license to
persecute or recklessly injure another."
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THE STATE IMMUNITY IS NOT WAIVED
ONLY FOR THE REASON THAT THE
PRESIDENT CREATED A COMMISSION TO
INVESTIGATE THE INCIDENT, OR BY THE
PRESIDENT’S ACT OF JOINING A RALLY OF
THE COMPLAINANTS. In effect, whatever
may be the findings of the Commission, the
same shall only serve as the cause of action in
the event that any party decides to litigate
his/her claim. Therefore, the Commission is
merely a preliminary venue. The Commission
is not the end in itself. Whatever
recommendation it makes cannot in any way
bind
the
State
immediately,
such
recommendation not having become final and
executory. This is precisely the essence of it
being a fact-finding body.
Secondly, whatever acts or utterances that
then President Aquino may have done or said,
the same are not tantamount to the State
having waived its immunity from suit. The
President's act of joining the marchers, days
after the incident, does not mean that there
was an admission by the State of any liability.
In fact to borrow the words of petitioners
(Caylao group), "it was an act of solidarity by
the government with the people". Moreover,
petitioners rely on President Aquino's speech
promising that the government would
address the grievances of the rallyists. By this
alone, it cannot be inferred that the State has
admitted any liability, much less can it be
inferred that it has consented to the suit.
Although consent to be sued may be given
impliedly, still it cannot be maintained that
such consent was given considering the
circumstances obtaining in the instant case.
REPUBLIC VS SANDOVAL
FACTS:
By reason of the Mendiola Massacre, wherein
twelve (12) rallyists died in their quest for
their “genuine agrarian reform”, President
Aquino issued Administrative Order No. 11
which created the Citizen’s Mendiola
Commission for the purpose of conducting an
investigation for the disorders, death, and
casualties that took place.
The most significant recommendation of the
commission was for the deceased and other
victims of Mendiola Incident to be
compensated by the Government.
Due to the recommendation, petitioners filed
a formal letter of demand for compensation
from the government to which the latter did
not take heed. The group then instituted an
action for damages against the Republic of the
Philippines together with military officers
and personnel involved in Mendiola Incident.
Respondent Judge Sandoval dismissed the
complaint as against the Republic of the
Philippines on the basis that there was no
waiver by the state. Hence, the petition for
Certiorari.
ISSUE:
Whether or not the state by virtue of the
Administrative Order waived its immunity
from suit.
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FESTEJO VS FERNANDO
RULING:
GR L-5156 March 11, 1954
No. Firstly, the recommendation made by the
commission does not in any way mean that
liability automatically attaches to the state. In
effect, the same shall only serve as a cause of
action in the event that any party decides to
litigate his or her claim. The commission is
merely a preliminary venue.
CASE DOCTRINE: ACTS COMMITTED BY
OFFICIALS OUTSIDE THEIR AUTHORITY
WILL NOT GIVE RISE TO THE CONCEPT OF
STATE IMMUNITY. Ordinarily the officer or
employee committing the tort is personally
liable therefor, and may be sued as any other
citizen and held answerable for whatever
injury or damage results from his tortious
act." — 49 Am. Jur. 289. . . If an officer, even
while acting under color of his office, exceeds
the power conferred on him by law, he cannot
shelter himself under the plea that he is a
public agent." — 43 Am. Jur. 86.
Secondly, whatever acts or utterances that
then President Aquino may have said or done,
the same are not tantamount to the state
having waived its immunity from suit.
The principle of State Immunity from suit
does not apply in this case, as when the relief
demanded by the suit requires no affirmative
official action on the part of the state in its
political capacity, even though the officers or
agents who are made defendants claim to
hold or act only by virtue of a title of the state
as its agents and servants.
WHAT ARE THE INSTANCES OF SUIT
AGAINST THE STATE?
1. When Republic is sued in its name
2. When suit is against an unincorporated
government agency
3. When suit is on its face against a
government officer but ultimate liability will
fall on the State
IS THIS CONLUSIVE?
No.
It is a general rule that an officer-executive,
administrative quasi-judicial, ministerial, or
otherwise who acts outside the scope of his
jurisdiction and without authorization of law
may thereby render himself amenable to
personal liability in a civil suit. If he exceeds
the power conferred on him by law, he cannot
shelter himself by the plea that he is a public
agent acting under color of his office, and not
personally. In the eye of the law, his acts then
are wholly without authority." — 43 Am. Jur.
89-90.
FESTEJO VS FERNANDO
FACTS:
Plaintiff Carmen Festejo filed an action
against defendant Isaias Fernando, Director
of Bureau of Public Works for unlawfully
taking possession of portion of her three
parcels of land and causing the construction
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of irrigation canal without obtaining right of
way and without her consent or knowledge.
intended to manifest our resolve to abide by
the rules of the international community.
The lower court ruled in favor of plaintiff
Festejo. On appeal, defendant Fernando
invoked his being a public officer of the
government of the Philippines and thus,
enjoys immunity from suit and should be
absolved from liability for damages.
Even without such affirmation, we would still
be bound by the generally accepted principles
of international law under the doctrine of
incorporation. Under this doctrine, as
accepted by the majority of states, such
principles are deemed incorporated in the
law of every civilized state as a condition and
consequence of its membership in the society
of nations. Upon its admission to such society,
the state is automatically obligated to comply
with these principles in its relations with
other states.
ISSUE:
Whether or not defendant Fernando may
invoke immunity from suit.
RULING:
No. Ordinarily, the officer or employee
committing the tort is personally liable and
may be sued as any other citizen and be held
answerable for whatever injury.
UNITED STATES OF AMERICA VS GUINTO
GR 76607 February 26, 1990
CASE DOCTRINE: CONCEPT OF STATE
IMMUNITY. - The rule that a state may not be
sued without its consent, now expressed in
Article XVI, Section 3, of the 1987
Constitution, is one of the generally accepted
principles of international law that we have
adopted as part of the law of our land under
Article II, Section 2. This latter provision
merely reiterates a policy earlier embodied in
the 1935 and 1973 Constitutions and also
As applied to the local state, the doctrine of
state immunity is based on the justification
given by Justice Holmes that "there can be no
legal right against the authority which makes
the law on which the right depends." There
are other practical reasons for the
enforcement of the doctrine. In the case of the
foreign state sought to be impleaded in the
local jurisdiction, the added inhibition is
expressed in the maxim par in parem, non
habet imperium. All states are sovereign
equals and cannot assert jurisdiction over one
another. A contrary disposition would, in the
language of a celebrated case, "unduly vex the
peace of nations."
While the doctrine appears to prohibit only
suits against the state without its consent, it is
also applicable to complaints filed against
officials of the state for acts allegedly
performed by them in the discharge of their
duties. The rule is that if the judgment against
such officials will require the state itself to
perform an affirmative act to satisfy the same,
such as the appropriation of the amount
needed to pay the damages awarded against
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them, the suit must be regarded as against the
state itself although it has not been formally
impleaded. In such a situation, the state may
move to dismiss the complaint on the ground
that it has been filed without its consent.
The doctrine is sometimes derisively called
"the royal prerogative of dishonesty" because
of the privilege it grants the state to defeat
any legitimate claim against it by simply
invoking its non-suability. That is hardly fair,
at least in democratic societies, for the state is
not an unfeeling tyrant unmoved by the valid
claims of its citizens. In fact, the doctrine is
not absolute and does not say the state may
not be sued under any circumstance. On the
contrary, the rule says that the state may not
be sued without its consent, which clearly
imports that it may be sued if it consents.
WAIVER OF STATE IMMUNITY. The consent
of the state to be sued may be manifested
expressly or impliedly. Express consent may
be embodied in a general law or a special law.
Consent is implied when the state enters into
a contract or it itself commences litigation.
The general law waiving the immunity of the
state from suit is found in Act No. 3083, under
which the Philippine government "consents
and submits to be sued upon any moneyed
claim involving liability arising from contract,
express or implied, which could serve as a
basis of civil action between private parties."
In Merritt v. Government of the Philippine
Islands, a special law was passed to enable a
person to sue the government for an alleged
tort. When the government enters into a
contract, it is deemed to have descended to
the level of the other contracting party and
divested of its sovereign immunity from suit
with its implied consent. Waiver is also
implied when the government files
complaint, thus opening itself to
counterclaim.
a
a
The above rules are subject to qualification.
Express consent is effected only by the will of
the legislature through the medium of a duly
enacted statute. We have held that not all
contracts entered into by the government will
operate as a waiver of its non-suability;
distinction must be made between its
sovereign and proprietary acts. As for the
filing of a complaint by the government,
suability will result only where the
government is claiming affirmative relief
from the defendant.
RESTRICTIVE
THEORY
OF
STATE
IMMUNITY. - There is no question that the
United States of America, like any other state,
will be deemed to have impliedly waived its
non-suability if it has entered into a contract
in its proprietary or private capacity. It is only
when the contract involves its sovereign or
governmental capacity that no such waiver
may be implied. This was our ruling in United
States of America v. Ruiz, where the
transaction in question dealt with the
improvement of the wharves in the naval
installation at Subic Bay. As this was a clearly
governmental function, we held that the
contract did not operate to divest the United
States of its sovereign immunity from suit. In
the words of Justice Vicente Abad Santos:
The traditional rule of immunity exempts a
State from being sued in the courts of another
State without its consent or waiver. This rule
is a necessary consequence of the principles
of independence and equality of States.
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However, the rules of International Law are
not petrified; they are constantly developing
and evolving. And because the activities of
states have multiplied, it has been necessary
to distinguish them — between sovereign and
governmental acts (jure imperii) and private,
commercial and proprietary acts (jure
gestionis). The result is that State immunity
now extends only to acts jure imperii. The
restrictive application of State immunity is
now the rule in the United States, the United
Kingdom and other states in Western Europe.
The restrictive application of State immunity
is proper only when the proceedings arise out
of commercial transactions of the foreign
sovereign, its commercial activities or
economic affairs. Stated differently, a State
may be said to have descended to the level of
an individual and can thus be deemed to have
tacitly given its consent to be sued only when
it enters into business contracts. It does not
apply where the contract relates to the
exercise of its sovereign functions. In this case
the projects are an integral part of the naval
base which is devoted to the defense of both
the United States and the Philippines,
indisputably a function of the government of
the highest order; they are not utilized for nor
dedicated to commercial or business
purposes.
SUABILITY IS NOT SYNONYMOUS WITH
LIABILITY. - The private respondent invokes
Article 2180 of the Civil Code which holds the
government liable if it acts through a special
agent. The argument, it would seem, is
premised on the ground that since the officers
are designated "special agents," the United
States government should be liable for their
torts.
There seems to be a failure to distinguish
between suability and liability and a
misconception that the two terms are
synonymous. Suability depends on the
consent of the state to be sued, liability on the
applicable law and the established facts. The
circumstance that a state is suable does not
necessarily mean that it is liable; on the other
hand, it can never be held liable if it does not
first consent to be sued. Liability is not
conceded by the mere fact that the state has
allowed itself to be sued. When the state does
waive its sovereign immunity, it is only giving
the plaintiff the chance to prove, if it can, that
the defendant is liable.
The said article establishes a rule of liability,
not suability. The government may be held
liable under this rule only if it first allows
itself to be sued through any of the accepted
forms of consent.
Moreover, the agent performing his regular
functions is not a special agent even if he is so
denominated, as in the case at bar. No less
important, the said provision appears to
regulate only the relations of the local state
with its inhabitants and, hence, applies only
to the Philippine government and not to
foreign governments impleaded in our courts.
Section 3, Article XVI of the 1987 Philippine
Constitution
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UNITED STATES VS GUINTO
FACTS:
In the first case, the private respondents are
suing several officers of the US Airforce
Stationed in Clark Air Base in connection with
the bidding conducted by them for contracts
for barber services in the base.
In the second case, private respondents filed a
complaint for damages against private
petitioners for his dismissal as cook in the US
Air Force Recreation Center at the John Hay
Air Station.
In the third case, private respondent, who
was employed as a barracks boy in a US base,
was arrested following a buy-bust operation
conducted by the individual petitioners,
officers of the US Air Force and Special Agents
of the US Air Force of Special Investigators.
He then filed a complaint for damages against
the individual petitioners claiming that it was
because of their acts that he was removed.
In the Fourth case, a complaint for damages
was filed by the private respondents against
the private petitioners, for inquiries allegedly
sustained by the plaintiffs as a result of the
acts of the defendants. According to the
plaintiffs, the defendants beat them up,
handcuffed them and unleashed dogs on them
which bit them in several parts of their bodies
and caused extensive injuries to them.
These cases have been consolidated because
they a;; involved the doctrine of state
immunity. The United States of America was
not impleaded in the complaints below but
has moved to dismiss on the ground that they
are in effect suits against it to which it has not
consented. It is now contesting the denial of
its motions by the respondent judges.
ISSUE:
Whether or not the doctrine of State
Immunity is not applicable thereby making
the state liable.
RULING:
NO.. While suable, the petitioners are
nevertheless not liable. It is obvious that the
claim for damages cannot be allowed on the
strength of the evidence which have been
carefully examined.
The traditional rule of immunity exempts a
State from being sued in the courts of another
state without its consent or waiver. This rule
is a necessary consequence of the principles
of independence and equality of States.
However, the rules of International law are
not petrified; they are constantly evolving
and developing. And because the activities of
the state have multiplied
it has been
necessary to distinguish them - between
sovereign and governmental acts (jure
imperii) and private, commercial and
proprietary acts (jure gestionis). The result is
that State immunity now extends only to acts
jure imperii. The restrictive application of
State immunity is now the rule in the United
States, the United Kingdom and other states
in Western Europe.
The restrictive application of State
immunity is proper only when the
proceedings arise out of commercial
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transactions of the foreign sovereign, its
commercial activities or economic affairs.
Stated differently, a State may be said to have
descended to the level of an individual and
can thus be deemed to have tacitly given its
consent to be sued only when it enters into
business contracts. It does not apply where
the contract relates to the exercise of its
sovereign functions. In this case the projects
are an integral part of the naval base which is
devoted to the defense of both the United
States and the Philippines, indisputably a
function of the government of the highest
order; they are not utilized for nor dedicated
to commercial or business purposes.
There is no question that the United States of
America, like any other state, will be deemed
to have impliedly waived its non-suability if it
has entered into a contract in its proprietary
or private capacity, as in the cases at bar. It is
only when the contract involves its sovereign
or governmental capacity that no such waiver
may be implied. A State may be said to have
descended to the level of an individual and
can thus be deemed to have tacitly given its
consent to be sued only when it enters into
business contracts.
The private respondents invoke Article 2180 of
the Civil Code which holds the government
liable if it acts through a special agent. The
argument, it would seem, is premised on the
ground that since the officers are designated
"special agents," the United States government
should be liable for their torts.
There seems to be a failure to distinguish
between suability and liability and a
misconception that the two terms are
synonymous. Suability depends on the
consent of the state to be sued, liability on the
applicable law and the established facts. The
circumstance that a state is suable does not
necessarily mean that it is liable; on the other
hand, it can never be held liable if it does not
first consent to be sued. Liability is not
conceded by the mere fact that the state has
allowed itself to be sued.
When the state does waive its sovereign
immunity, it is only giving the plaintiff the
chance to prove, if it can, that the defendant is
liable. The said article establishes a rule of
liability , not suability. The government may
be held liable under this rule only if it first
allows itself to be sued through any of the
accepted forms of consent. Moreover, the
agent performing his regular functions is not
a special agent even if he is so denominated,
as in the case at bar. No less important, the
said provision appears to regulate only the
relations of the local state with its inhabitants
and, hence, applies only to the Philippine
government and not to foreign governments
impleaded in our courts. The complaints
against the petitioners in the court below
were aptly dismissed.
VETERANS MANPOWER AND PROTECTIVE
SERVICE, INC. VS CA
(G.R. NO. 91359, SEPTEMBER 25, 1992)
CASE DOCTRINE: WAIVER OF STATE IS
CONSTRUED STRICTISSIMI JURIS. - Waiver of
the State's immunity from suit, being a
derogation of sovereignty, will not be lightly
inferred, but must be construed strictissimi
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juris (Republic vs. Feliciano, 148 SCRA 424).
The consent of the State to be sued must
emanate from statutory authority, hence,
from a legislative act, not from a mere
memorandum. Without such consent, the trial
court did not acquire jurisdiction over the
public respondents.
We agree with the observation of the Court of
Appeals that the Memorandum of Agreement
dated May 12, 1986 does not constitute an
implied consent by the State to be sued:
"The Memorandum of Agreement dated May
12, 1986 was entered into by the PC Chief in
relation to the exercise of a function
sovereign in nature. The correct test for the
application of state immunity is not the
conclusion of a contract by the State but the
legal nature of the act. This was clearly
enunciated in the case of United States of
America vs. Ruiz where the Hon. Supreme
Court held:
"'The restrictive application of State
immunity is proper only when the
proceedings arise out of commercial
transactions of the foreign sovereign, its
commercial activities or economic affairs.
Stated differently, a State may be said to have
descended to the level of an individual and
can thus be deemed to have tacitly given its
consent to be sued only when it enters into a
business contract. It does not apply where the
contract relates to the exercise of its
functions.' (136 SCRA 487, 492.)
"In the instant case, the Memorandum of
Agreement entered into by the PC Chief and
PADPAO was intended to professionalize the
industry and to standardize the salaries of
security guards as well as the current rates of
security services, clearly, a governmental
function. The execution of the said agreement
is incidental to the purpose of R.A. 5487, as
amended, which is to regulate the
organization and operation of private
detective, watchmen or security guard
agencies. (Emphasis Ours.)" (pp. 258-259,
Rollo.)
The state immunity doctrine rests upon
reasons of public policy and the
inconvenience and danger which would flow
from a different rule. "It is obvious that public
service would be hindered, and public safety
endangered, if the supreme authority could
be subjected to suits at the instance of every
citizen, and, consequently, controlled in the
use and disposition of the means required for
the proper administration of the government"
(Siren vs. U.S. Wall, 152, 19 L. ed. 129, as cited
in 78 SCRA 477). In the same vein, this Court
in Republic vs. Purisima (78 SCRA 470, 473)
rationalized:
"Nonetheless, a continued adherence to the
doctrine of nonsuability is not to be deplored
for as against the inconvenience that may be
cause [by] private parties, the loss of
governmental efficiency and the obstacle to
the performance of its multifarious functions
are far greater if such a fundamental principle
were abandoned and the availability of
judicial remedy were not thus restricted.
With the well known propensity on the part
of our people to go to court, at the least
provocation, the loss of time and energy
required to defend against law suits, in the
absence of such a basic principle that
constitutes such an effective obstacles, could
very well be imagined." (citing Providence
Washington Insurance Co. vs. Republic, 29
SCRA 598.)
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VETERANS MANPOWER AND PROTECTIVE
SERVICE, INC. VS COURT OF APPEALS
FACTS:
A suit was filed against the PC Chief for failure
to act on the request by petitioner seeking to
set aside the findings of PADPAO expelling it
from PADPAO and considering its application
for renewal of its license even without a
certificate of membership from PADPAO. A
Motion to Dismiss was filed invoking that it is
a suit against the State which had not given its
consent.
ISSUES:
1. Whether or not the action taken by
the petitioners is a suit against the
State.
2. Whether of not the PC Chief and PCSUSIA are liable in their private
capacities.
3. Whether or not the Memorandum of
Agreement constitute as an implied
consent of the State to be sued
HELD:
1. Yes, it is a suit against the State, the
PC Chief and PC-SUSIA being
instrumentalities
of
the
State
exercising the governmental function
of regulating the organization and
operation of private detective
watchmen or security guard agencies.
Even if its action prospers, the
payment of its monetary claims may
not be enforced because the State did
not consent to appropriate the
necessary funds for the purpose.
2. No, since the acts for which the PC
Chief and PC-SUSIA are being called to
account in this case, were performed
by them as part of their official duties,
without malice, gross negligence or
bad faith, no recovery may be held
against them in their private
capacities.
3. No, the Memorandum of Agreement
did not constitute an implied consent
by the State to be sued because it was
intended to professionalize the
industry and to standardized the
salaries of the security guards. It is
merely incidental to the purpose of
RA No. 5487 which is to regulate the
organization and operation of private
security agencies. The State is deemed
to have given tacitly its consent to be
sued when it enters into a contract.
However, it does not apply where the
contact relates to the exercise of its
sovereign functions.
SUIT AGAINST PUBLIC OFFICERS
-
The doctrine of State immunity also
applies to complaints filed against
officials of the State for acts
performed by them in the discharge of
their duties within the scope of their
authority. Thus, in the Veterans
Manpower case, the suit against the
PC Chief and PC-SUSIA was dismissed
for being a suit against the state, since
it was a suit against public officers in
the discharge of official functions
which are governmental in character.
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Likewise, in Larkins v. NLRC, 241 SCRA
598, it was noted that the private
respondents were dismissed from
their employment by Lt. Col.
Frankhauser acting for and in behalf
of the US government which, by right
of sovereign power, operated and
maintained the dormitories at the
Clark Air Base for USAF members.
MERRITT vs. GOVERNMENT OF
PHILIPPINES
(G.R. NO. L-11154, MARCH 21, 1916)
TRENT, J.
THE
CASE DOCTRINE: SPECIAL LAW WAIVING
STATE IMMUNITY. - Act No. 2457, effective
February 3, 1915, reads:
"An act authorizing E. Merritt to bring suit
against the Government of the Philippine
Islands and authorizing the Attorney-General
of said Islands to appear in said suit.
"Whereas a claim has been filed against the
Government of the Philippine Islands by Mr. E.
Merritt, of Manila, for damages resulting from
a collision between his motorcycle and the
ambulance of the General Hospital on March
twenty-fifth, nineteen hundred and thirteen;
"Whereas it is not known who is responsible
for the accident nor is it possible to determine
the amount of damages, if any, to which the
claimant is entitled; and
"Whereas the Director of Public Works and
the Attorney-General recommend that an act
be passed by the Legislature authorizing Mr.
E. Merritt to bring suit in the courts against
the Government, in order that said questions
may be decided: Now, therefore,
"By authority of the United States, be it
enacted by the Philippine Legislature, that:
"SECTION 1. E. Merritt is hereby authorized to
bring suit in the Court of First Instance of the
city of Manila against the Government of the
Philippine Islands in order to fix the
responsibility for the collision between his
motorcycle and the ambulance of the General
Hospital, and to determine the amount of the
damages, if any, to which Mr. E. Merritt is
entitled on account of said collision, and the
attorney- General of the Philippine Islands is
hereby authorized and directed to appear at
the trial on the behalf of the Government of
said Islands, to defend said Government at the
same.
"SEC. 2. This Act shall take effect on its passage.
"Enacted, February 3, 1915."
Did the defendant, in enacting the above
quoted act, simply waive its immunity from
suit or did it also concede its liability to the
plaintiff? If only the former, then it cannot be
held that the Act created any new cause of
action in favor of the plaintiff or extended the
defendant's liability to any case not
previously recognized.
All admit that the Insular Government (the
defendant) cannot be sued by an individual
without its consent. It is also admitted that
the instant case is one against the
Government. As the consent of the
Government to be sued by the plaintiff was
entirely voluntary on its part, it is our duty to
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look carefully into the terms of the consent,
and render judgment accordingly.
Act of 1913, which authorized the bringing of
this suit, read:
The plaintiff was authorized to bring this
action against the Government "in order to fix
the responsibility for the collision between
his motorcycle and the ambulance of the
General Hospital and to determine the
amount of the damages, if any, to which Mr. E.
Merritt is entitled on account of said
collision, . . . ." These were the two questions
submitted to the court for determination. The
Act was passed "in order that said questions
may be decided." We have "decided" that the
accident was due solely to the negligence of
the chauffeur, who was at the time an
employee of the defendant, and we have also
fixed the amount of damages sustained by the
plaintiff as a result of the collision. Does the
Act authorize us to hold that the Government
is legally liable for that amount? If not, we
must look elsewhere for such authority, if it
exists.
"SECTION 1.Authority is hereby given to
George Apfelbacher, of the town of Summit,
Waukesha County, Wisconsin, to bring suit in
such court or courts and in such form or
forms as he may be advised for the purpose of
settling and determining all controversies
which he may now have with the State of
Wisconsin, or its duly authorized officers and
agents, relative to the mill property of said
George Apfelbacher, the fish hatchery of the
State Wisconsin on the Bark River, and the
mill property of Evan Humphrey at the lower
end of Nagawicka Lake, and relative to the
use of the waters of said Bark River and
Nagawicka Lake, all in the county of
Waukesha, Wisconsin."
SUABILITY VS. LIABILITY. - As to the scope
of
legislative
enactments
permitting
individuals to sue the state where the cause of
action arises out of either tort or contract, the
rule is stated in 36 Cyc., 915, thus:
"By consenting to be sued a state simply
waives its immunity from suit. It does not
thereby concede its liability to plaintiff, or
create any cause of action in his favor, or
extend its liability to any cause not previously
recognized. It merely gives a remedy to
enforce a preexisting liability and submits
itself to the jurisdiction of the court, subject to
its right to interpose any lawful defense."
In Apfelbacher vs. State (152 N. W., 144,
advanced sheets), decided April 16, 1915, the
In determining the scope of this act, the court
said;
"Plaintiff claims that by the enactment of this
law the legislature admitted liability on the
part of the state for the acts of its officers, and
that the suit now stands just as it would stand
between private parties. It is difficult to see
how the act does, or was intended to do, more
than remove the state's immunity from suit. It
simply gives authority to commence suit for
the
purpose
of
settling
plaintiff's
controversies with the state. Nowhere in the
act is there a whisper or suggestion that the
court or courts in the disposition of the suit
shall depart from well established principles
of law, or that the amount of damages is the
only question to be settled. The act opened
the door of the court to the plaintiff. It did not
pass upon the question of liability, but left the
suit just where it would be in the absence of
the state's immunity from suit. If the
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Legislature had intended to change the rule
that obtained in this state so long and to
declare liability on the part of the state, it
would not have left so important a matter to
mere inference but would have done so in
express terms. (Murdoc Grate Co. vs.
Commonwealth, 152 Mass., 28; 24 N. E., 854;
8 L. R.A., 399)
It being quite clear that Act No. 2457 does not
operate to extend the Government's liability
to any cause not previously recognized, we
will now examine the substantive law
touching the defendant's liability for the
negligent acts of its officers, agents, and
employees. Paragraph 5 of article 1903 of the
civil Code reads:
"The state is liable in this sense when it acts
through a special agent, but not when the
damage should have been caused by the
official to whom properly it pertained to do
the act performed, in which case the
provisions of the preceding article shall be
applicable."
MERRITT vs. GOVERNMENT OF THE
PHILIPPINES
FACTS:
Merritt, while riding his motorcycle was hit
by an ambulance owned by the Philippine
General Hospital. A driver employed by the
hospital drove it. In order for Merritt to sue
the Philippine government, Act No. 2457 was
enacted by the Philippine Legislature
authorizing Merritt to bring suit against the
Government of the Philippine Islands and
authorizing the Attorney-General of said
Islands to appear in said suit. A suit was then
filed before the CFI of Manila, which fixed the
responsibility for the collision solely on the
ambulance driver and determined the
amount of
damages to be awarded to Merritt. Both
parties appealed from the decision, plaintiff
Merritt as to the amount of damages and
defendant in rendering the amount against
the government.
ISSUE:
Whether
or
not
defendant,
Government of the Philippines, waived its
immunity from suit as well as conceded its
liability to the plaintiff when it enacted Act No.
2457
HELD:
NO. By consenting to be sued, a state simply
waives its immunity from suit. It does not
thereby concede its liability to the plaintiff, or
create any cause of action in his favor, or
extend its liability to any cause not previously
recognized. It merely gives a remedy to
enforce a pre-existing liability and submit
itself to the jurisdiction of the court, subject to
its right to interpose any lawful defense.
The Government of the Philippines Islands is
only liable, for the acts of its agents, officers
and employees when they act as special
agents. A special agent is one who receives a
definite and fixed order or commission,
foreign to the exercise of the duties of his
office if he is a special official. The special
agent acts in representation of the state and
being bound to act as an agent thereof, he
executes the trust confided to him. This
concept does not apply to any executive agent
who is an employee of the acting
administration and who on his own
responsibility performs the functions which
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are inherent in and naturally pertain to his
office and which are regulated by law and the
regulations. The responsibility of the state is
limited to that which it contracts through a
special agent, duly empowered by a definite
order or commission to perform some act or
charged with some definite purpose which
gives rise to the claim, and not where the
claim is based on acts or omissions imputable
to a public official charged with some
administrative or technical office who can be
held to the proper responsibility in the
manner laid down by the law of civil
responsibility. The chauffeur of the
ambulance of the General Hospital was not
such an agent.
WHY IS A STATE IMMUNITY FROM SUIT
OFTEN CALLED THE ROYAL PREROGATIVE
OF DISHONESTY?
-
-
The government itself can easily
defeat a claim by invoking the
doctrine of non-suability
- State can conveniently defeat
rightful legal claims against it.
FROM NACHURA:
Suability not equated with outright liability.
Liability will have to be determined by the
Court
on the basis of the evidence and the
applicable law.
a) In Merritt v. Government of the Philippine
Islands, supra., while consent to be sued was
granted through a special law, the
government was held not liable for damages,
because under the attendant circumstances
the government was not acting through a
special agent.
b) In Fontanilla v. Maliaman, 194 SCRA 486,
the Supreme Court said that the National
Irrigation Administration is a government
agency with a juridical personality separate
and distinct from the government; it is a
corporate body performing proprietary
functions. Thus, the NIA may be held liable for
damages caused by the negligent act of its
driver who was not a special agent.
This was reiterated in National Irrigation
Administration v. Court of Appeals, 214 SCRA
35.
CAN THE DOCTRINE OF STATE IMMUNITY
BE USED TO PERPETRATE INJUSTICE?
-
No. Government cannot evade the
payment of just compensation as
stated in the case of Amigable vs.
Cuenca
AMIGABLE VS. CUENCA
(G.R. NO. L-26400 FEBRUARY 29, 1972)
MAKALINTAL, J.
CASE DOCTRINE: THE DOCTRINE OF STATE
IMMUNITY
CANNOT
BE
USED
TO
PERPETRATE INJUSTICE. - In the case of
Ministerio vs. Court of First Instance of Cebu,
1 involving a claim for payment of the value
of a portion of land used for the widening of
the Gorordo Avenue in Cebu City, this Court,
through Mr. Justice Enrique M. Fernando, held
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that where the government takes away
property from a private landowner for public
use without going through the legal process
of expropriation or negotiated sale, the
aggrieved party may properly maintain a suit
against the government without thereby
violating the doctrine of governmental
immunity from suit without its consent. We
there said:
". . . If the constitutional mandate that the
owner be compensated for property taken for
public use were to be respected, as it should,
then a suit of this character should not be
summarily dismissed. The doctrine of
governmental immunity from suit cannot
serve as an instrument for perpetrating an
injustice on a citizen. Had the government
followed the procedure indicated by the
governing law at the time, a complaint would
have been filed by it, and only upon payment
of the compensation fixed by the judgment, or
after tender to the party entitled to such
payment of the amount fixed, may it have the
right to enter in and upon the land so
condemned, to appropriate the same to the
public use defined in the judgment.' If there
were an observance of procedural regularity,
petitioners would not be in the sad plaint they
are now. It is unthinkable then that precisely
because there was a failure to abide by what
the law requires, the government would
stand to benefit. It is just as important, if not
more so, that there be fidelity to legal norms
on the part of officialdom if the rule of law
were to be maintained. It is not too much to
say that when the government takes any
property for public use, which is conditioned
upon the payment of just compensation, to be
judicially ascertained, it makes manifest that
it submits to the jurisdiction of a court. There
is no thought then that the doctrine of
immunity from suit
appropriately invoked."
could
still
be
AMIGABLE VS. CUENCA
FACTS:
Amigable is the registered owner of a lot
covered by a Transfer Certificate of Title,
where no annotation in favor of the
government of any right or interest in the
property appears at the back of the certificate.
Without prior expropriation or negotiated
sale, the government used a portion of said
lot for the construction of the Mango and
Gorordo Avenues. It appears that said
avenues already existed since 1921. In 1958,
Amigable's counsel wrote the President of the
Philippines, requesting payment of the
portion of her lot which had been
appropriated by the government. The claim
was indorsed to the Auditor General, who
disallowed it. Amigable then filed in the court
a quo a complaint against the Republic of the
Philippines and Nicolas Cuenca, in his
capacity as Commissioner of Public Highways
for the recovery of ownership and possession
of the land traversed by the Mango and
Gorordo Avenues. She also sought the
payment of compensatory damages for the
illegal occupation of her land, moral damages,
attorney's fees and the costs of the suit. The
Government had not given its consent to be
sued.
ISSUE: Whether or not the appellant may
properly sue the government under the facts
of the case
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HELD:
REPUBLIC VS. SANDIGANBAYAN
204 SCRA 212 (1991)
YES. Where the government takes away
property from a private landowner for public
use without going through the legal process
of expropriation or negotiated sale, the
aggrieved party may properly maintain a suit
against the government without thereby
violating the doctrine of governmental
immunity from suit without its consent. The
doctrine of governmental immunity from suit
cannot serve as an instrument for
perpetrating an injustice on a citizen. Had the
government followed the procedure indicated
by the governing law at the time, a complaint
would have been filed by it, and only upon
payment of the compensation fixed by the
judgment, or after tender to the party entitled
to such payment of the amount fixed, may it
"have the right to enter in and upon the land
so condemned, to appropriate the same to the
public use defined in the judgment." If there
were an observance of procedural regularity,
petitioners would not be in the sad plaint they
are now. It is unthinkable then that precisely
because there was a failure to abide by what
the law requires, the government would
stand to benefit. It is not too much to say that
when the government takes any property for
public use, which is conditioned upon the
payment of just compensation, to be judicially
ascertained, it makes manifest that it submits
to the jurisdiction of a court. There is no
thought then that the doctrine of immunity
from suit could still be appropriately invoked.
CASE DOCTRINE: STATE IMPLIEDLY
WAIVES ITS IMMUNITY WHEN IT
COMMENCES LITIGATION. - So, too, the
PCGG's postulation that none of its members
may be "required to testify or produce
evidence in any judicial . . . proceeding
concerning matters within its official
cognizance," has no application to a judicial
proceeding it has itself initiated. As just
suggested, the act of bringing suit must entail
a waiver of the exemption from giving
evidence; by bringing suit it brings itself
within the operation and scope of all the rules
governing civil actions, including the rights
and duties under the rules of discovery.
Otherwise, the absurd would have to be
conceded, that while the parties it has
impleaded as defendants may be required to
"disgorge all the facts" within their
knowledge and in their possession, it may not
itself be subject to a like compulsion.
The State is, of course, immune from suit in
the sense that it cannot, as a rule, be sued
without its consent. But it is axiomatic that in
filing an action, it divests itself of its sovereign
character and sheds its immunity from suit,
descending to the level of an ordinary litigant.
The PCGG cannot claim a superior or
preferred status to the State, even while
assuming to represent or act for the State.
The suggestion that the State makes no
implied waiver of immunity by filing suit
except when in so doing it acts in, or in
matters concerning, its proprietary or nongovernmental capacity, is unacceptable; it
attempts a distinction without support in
principle or precedent. On the contrary —
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"The consent of the State to be sued may be
given expressly or impliedly. Express consent
may be manifested either through a general
law or a special law. Implied consent is given
when the State itself commences litigation or
when it enters into a contract."
"The immunity of the State from suits does
not deprive it of the right to sue private
parties in its own courts. The state as plaintiff
may avail itself of the different forms of
actions open to private litigants. In short, by
taking the initiative in an action against the
private parties, the state surrenders its
privileged position and comes down to the
level of the defendant. The latter
automatically acquires, within certain limits,
the right to set up whatever claims and other
defenses he might have against the state. . . .
(Sinco, Philippine Political Law, Tenth E., pp.
36-37, citing U.S. vs. Ringgold, 8 Pet. 150, 8
L.ed. 899)'" 51
It can hardly be doubted that in exercising the
right of eminent domain, the State exercises
its jus imperii, as distinguished from its
proprietary rights or jus gestionis. Yet, even
in that area, it has been held that where
private property has been taken in
expropriation without just compensation
being paid, the defense of immunity from suit
cannot be set up by the State against an action
for payment by the owner.
REPUBLIC VS. SANDIGANBAYAN
FACTS:
The PCGG filed with the Sandiganbayan a
complaint for reconveyance, reversion,
accounting, restitution, and damages against
private respondents Bienvenido Tantoco and
Dominador Santiago, et
al. Private
respondents jointly moved “to strike out
some portions of the complaint and for bill of
particulars of other portions”, which motion
was
opposed
by
the
PCGG.
The
Sandiganbayan gave the PCGG 45 days to
expand its complaint to make more specific
certain allegations. Private respondents then
presented a “Motion to leave to file
interrogatories under Rule 25 of the Rules of
Court”. The Sandiganbayan denied private
respondents’ motions. Private respondents
filed an Answer to with Compulsory
Counterclaim. In response, the PCGG
presented a “Reply to Counterclaim with
Motion to Dismiss compulsory counterclaim.”
Private respondents filed a pleading
denominated “Interrogatories to Plaintiff”,
and “Amended Interrogatories to Plaintiff” as
well as a motion for production and
inspection of documents. The Sandiganbayan
admitted the Amended Interrogatories and
granted the motion for production and
inspection of documents respectively. The
PCGG moved for reconsideration, arguing that
the documents are privileged in character
since they are intended to be used against the
PCGG and/or its Commission in violation of
Sec.4 of EO No.1, V12:
a) No civil action shall lie against the
Commission or any member thereof for
anything done or omitted in the discharge of
the task contemplated by this order.
b) No member or staff by the Commission
shall be required to testify or produce
evidence in any judicial, legislative or
administrative
proceedings
concerning
matter within its official cognizance.
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The Sandiganbayan promulgated two
Resolutions.
The
first,
denying
reconsideration of the Resolution allowing
production of the documents, and the second,
reiterating, by implication the permission to
serve the amended interrogatories on the
plaintiff.
ISSUE: Is the PCGG immune from suit?
HELD:
NO. The state is of course immune from suit
in the sense that it cannot, as a rule, be sued
without its consent. But it is axiomatic that in
filing an action, it divests itself of its sovereign
character and sheds its immunity from suit,
descending to the level of an ordinary litigant.
The PCGG cannot claim a superior or
preferred status to the State, even while
assuming of an act for the State. The
suggestion that the State makes no implied
waiver of immunity by filing a suit except
when in doing so it acts in, or in matters
concerning, its proprietary or nongovernmental capacity,is unacceptable. It
attempts a distinction without support in
principle or precedent. On the contrary, “the
consent of the State to be sued may be given
expressly or impliedly.” Express consent may
be manifested either through a general law or
a special law. Implied consent is given when
the State itself commences litigation or when
it enters into a contract.
Inequitable situation that will result :
boxing match! Government can punch, but
cannot be punched back. [Rep. vs.
Sandiganbayan]
Permissive counterclaim – Still, state has
immunity
REPUBLIC OF THE PHILIPPINES VS. PABLO
FELICIANO
AND INTERMEDIATE APPELLATE COURT
G.R. NO. 70853; MARCH 12, 1987
CASE DOCTRINE:
EXPRESS CONSENT THROUGH THE ACT OF
THE LEGISLATIVE BODY
- Need for consent. In order that suit
may lie against the state, there must
be consent, either express or implied.
Where no consent is shown, state
immunity from suit may be invoked as
a defense by the courts sua sponte at
any stage of the proceedings, because
waiver of immunity, being in
derogation of sovereignty, will not be
inferred lightly and must be
construed
in
strictissimi juris.
Accordingly, the complaint (or
counterclaim) against the State must
allege the existence of such consent
(and where the same is found),
otherwise, the complaint may be
dismissed [Republic v. Feliciano, 148
SCRA 424].
We find the petition meritorious. The
doctrine of non-suability of the State has
proper application in this case. The plaintiff
has impleaded the Republic of the Philippines
as defendant in an action for recovery of
ownership and possession of a parcel of land,
bringing the State to court just like any
private person who is claimed to be usurping
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a piece of property. A suit for the recovery of
property is not an action in rem, but an action
in personam. It is an action directed against a
specific party or parties, and any judgment
therein binds only such party or parties. The
complaint filed by plaintiff, the private
respondent herein, is directed against the
Republic of the Philippines, represented by
the Land Authority, a governmental agency
created by Republic Act No. 3844.
By its caption and its allegation and prayer,
the complaint is clearly a suit against the
State, which under settled jurisprudence is
not permitted, except upon a showing that the
State has consented to be sued, either
expressly or by implication through the use of
statutory language too plain to be
misinterpreted. There is no such showing in
the instant case. Worse, the complaint itself
fails to allege the existence of such consent.
This is a fatal defect, and on this basis alone,
the complaint should have been dismissed.
THE STATE IMMUNITY MAY BE INVOKED
AT ANY STAGE OF THE PROCEEDINGS. The failure of the petitioner to assert the
defense of immunity from suit when the case
was tried before the court a quo, as alleged by
private respondent, is not fatal. It is now
settled that such defense "may be invoked by
the courts sua sponte at any stage of the
proceedings."
EXPRESS WAIVER OF IMMUNITY MUST BE
THROUGH LEGISLATIVE ACT. - Private
respondent contends that the consent of
petitioner may be read from the Proclamation
itself, when it established the reservation
"subject to private rights, if any there be." We
do not agree. No such consent can be drawn
from the language of the Proclamation. The
exclusion of existing private rights from the
reservation established by Proclamation No.
90 can not be construed as a waiver of the
immunity of the State from suit. Waiver of
immunity, being a derogation of sovereignty,
will not be inferred lightly, but must be
construed in strictissimi juris. Moreover, the
Proclamation is not a legislative act. The
consent of the State to be sued must emanate
from statutory authority. Waiver of State
immunity can only be made by an act of the
legislative body.
Neither is there merit in respondent's
submission. which the respondent appellate
court sustained, on the basis of our decision
in the Begosa case, that the present action is
not a suit against the State within the rule of
State immunity from suit, because plaintiff
does not seek to divest the Government of
any of its lands or its funds. It is contended
that the complaint involves land not owned
by the State, but private land belonging to the
plaintiff, hence the Government is not being
divested of any of its properties. There is
some sophistry involved in this argument,
since the character of the land sought to be
recovered still remains to be established, and
the plaintiff's action is directed against the
State precisely to compel the latter to litigate
the ownership and possession of the property.
In other words, the plaintiff is out to establish
that he is the owner of the land in question
based, incidentally, on an informacion
posesoria of dubious value, and he seeks to
establish his claim of ownership by suing the
Republic of the Philippines in an action in
personam.
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REPUBLIC OF THE PHILIPPINES VS.
PABLO FELICIANO
FACTS:
Petitioner seeks the review of the decision of
the Intermediate Appellate Court dated April
30, 1985, which dismissed the complaint of
respondent Pablo Feliciano for recovery of
ownership and possession of a parcel of land
on the ground of non-suability of the State. On
January 22, 1970, Feliciano filed a complaint
with then Court of First Instance of Camarines
Sur against the RP, represented by the Land
Authority, for the recovery of ownership and
possession of a parcel of land, consisting of
four (4) lots with an aggregate area of
1,364.4177 hectares, situated in the Barrio of
Salvacion,
Municipality
of
Tinambac,
Camarines Sur. Feliciano alleged that he
bought the property in question from Victor
Gardiola by virtue of a Contract of Sale dated
May 31, 1952, followed by a Deed of Absolute
Sale on October 30, 1954; that Gardiola had
acquired the property by purchase from the
heirs of Francisco Abrazado whose title to the
said property was
evidenced by an informacion posesoria that
upon his purchase of the property, he took
actual possession of the same, introduced
various improvements therein and caused it
to be surveyed in July 1952, which survey
was approved by the Director of Lands on
October 24,1954.
On November 1, 1954, President Ramon
Magsaysay issued Proclamation No. 90
reserving for settlement purposes, under the
administration of the National Resettlement
and Rehabilitation
Administration (NARRA), a tract of land
situated in the Municipalities of Tinambac
and Siruma, Camarines Sur, after which the
NARRA and its successor agency, the Land
Authority,
started
sub-dividing
and
distributing the land to the settlers; that the
property in question, while located within the
reservation established under Proclamation
No. 90, was the private property of Feliciano
and should therefore be excluded therefrom.
Feliciano prayed that he be declared the
rightful and true owner of the property in
question consisting of 1,364.4177 hectares;
that his title of ownership based on
informacion posesoria of his predecessor-ininterest be declared legally valid and
subsisting and that defendant be ordered to
cancel and nullify all awards to the settlers.
ISSUE:
Whether or not the State can be sued for
recovery and possession of a parcel of land
HELD:
A suit against the State, under settled
jurisprudence is not permitted, except upon a
showing that the State has consented to be
sued, either expressly or by implication
through the use of statutory language too
plain to be misinterpreted. It may be invoked
by the courts sua sponte at any stage of the
proceedings. Waiver of immunity, being a
derogation of sovereignty, will not be inferred
lightly, but must be construed instrictissimi
juris (of strictest right).
Moreover, the Proclamation is not a
legislative act. The consent of the State to be
sued must emanate from statutory authority.
Waiver of State immunity can only be made
by an act of the legislative body. Also, it is
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noteworthy, that as pointed out by the
Solicitor General, that the informacion
posesoria registered in the Office of the
Register of Deed of Camarines Sur on
September 23, 1952 was a "reconstituted"
possessory information; it was "reconstituted
from the duplicate presented to this office
(Register of Deeds) by Dr. Pablo Feliciano,"
without the submission of proof that the
alleged duplicate was authentic or that the
original thereof was lost. Reconstitution can
be validly made only in case of loss of the
original. These circumstances raise grave
doubts as to the authenticity and validity of
the "informacion posesoria" relied upon by
respondent Feliciano. Adding to the
dubiousness of said document is the fact that
"possessory information calls for an area of
only 100 hectares," whereas the land claimed
by
respondent
Feliciano
comprises
1,364.4177 hectares, later reduced to 7019064 hectares.
FROM NACHURA:
a) Express consent. Express consent can be
given only by an act of the legislative body
[Republic v. Feliciano, supra.], in a general or a
special law. i)
into in its governmental capacity, because of
the express consent contained in Act No. 3038,
provided that the claim be first brought to the
Commission on Audit in accordance with CA
327, as amended [Department of Agriculture v.
NLRC, 227 SCRA 693].
ia) But in Amigable v. Cuenca, 43 SCRA 360, an
action for the recovery of the value of the
property taken by the government and
converted into a public street without
payment of just compensation was allowed,
despite the failure of the property owner to
file his claim with the Auditor General.
Invoking Ministerio v. City of Cebu, 40 SCRA
464, the Supreme Court said that suit may lie
because the doctrine of State immunity
cannot be used to perpetrate an injustice.
This ruling was reiterated in De los Santos v.
Intermediate Appellate Court, 223 SCRA 11,
where it was held that the “public
respondents’ belief that the property is public,
even if buttressed by statements of other
public officials, is no reason for the unjust
taking of petitioner’s property”; after all, the
TCT was in the name of the petitioner. See
also Republic v. Sandiganbayan, 204 SCRA 212.
i) General Law. An example of a general law
granting consent is CA327, as amended by PD
1445, which requires that all money claims
against the government must first be filed
with the
Commission on Audit before suit is instituted
in court. See: Sayson v. Singzon, 54 SCRA 282.
In EPG Construction v. Secretary Vigilar, G.R.
No. 131544, March 16, 2001, the ruling in
Ministerio was invoked when the respondent
DPWH Secretary denied the money claims of
petitioners even after the DPWH Auditor
interposed no objection to the payment and
the DBM had ordered the release of the
amount under a corresponding Advise of
Allotment it issued.
The Department of Agriculture may be sued
for money claims based on a contract entered
Where in Ministerio, the Court said that the
doctrine cannot serve as an instrument for
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perpetrating an injustice on a citizen, in this
case the Supreme Court declared that it is just
as
important, if not more so, that there be
fidelity to legal norms on the part of
officialdom if the rule of law were to be
maintained.
In Santiago v. Republic, 87 SCRA 294, an action
for the revocation of a donation because of
the failure of the defendant to comply with
stipulated conditions was allowed, inasmuch
as the action did not involve a money
claim.
b) Implied Consent. When the State
commences litigation, it becomes vulnerable
to a counterclaim [See: Froilan v. Pan Oriental
Shipping, G.R. No. L-6060, Sept. 30, 1950].
Intervention by the State would constitute
commencement of litigation, except when the
State intervenes not for the purpose of asking
for any affirmative relief, but only for the
purpose of resisting the claim precisely
because of immunity from suit [Lim v.
Brownell, 107 Phil. 345],
UNITED STATES OF AMERICA VS. RUIZ
136 SCRA 487 (1985)
CASE DOCTRINE: RESTRICTIVE THEORY OF
STATE IMMUNITY. The traditional rule of
State immunity exempts a State from being
sued in the courts of another State without its
consent or waiver. This rule is a necessary
consequence
of
the
principles
of
independence and equality of States.
However, the rules of International Law are
not petrified; they are constantly developing
and evolving. And because the activities of
states have multiplied, it has been necessary
to distinguish them — between sovereign and
governmental acts (jure imperii) and private,
commercial and proprietary acts (jure
gestionis). The result is that State immunity
now extends only to acts jure imperii. The
restrictive application of State immunity is
now the rule in the United States, the United
Kingdom and other states in western Europe.
(See Coquia and Defensor-Santiago, Public
International Law, pp. 207-209 [1984].)
The restrictive application of State immunity
is proper only when the proceedings arise out
of commercial transactions of the foreign
sovereign, its commercial activities or
economic affairs. Stated differently, a State
may be said to have descended to the level of
an individual and can thus be deemed to have
tacitly given its consent to be sued only when
it enters into business contracts. It does not
apply where the contract relates to the
exercise of its sovereign functions. In this case
the projects are an integral part of the naval
base which is devoted to the defense of both
the United States and the Philippines,
indisputably a function of the government of
the highest order; they are not utilized for nor
dedicated to commercial or business
purposes.
That the correct test for the application of
State immunity is not the conclusion of a
contract by a State but the legal nature of the
act is shown in Syquia vs. Lopez, 84 Phil. 312
(1949). In that case the plaintiffs leased three
apartment buildings to the United States of
America for the use of its military officials.
The plaintiffs sued to recover possession of
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the premises on the ground that the term of
the leases had expired, They also asked for
increased rentals until the apartments shall
have been vacated.
UNITED STATES OF AMERICA VS. RUIZ
FACTS:
Petitioner invited the submission of bids for
repair of its wharves and shoreline in the
Subic Bay Area. Eligion and Co. responded to
the invitation and submitted bids. Said
company was requested by telegram to
confirm its price proposals and for the name
of its bonding company, and from which it
complied.
Later, the United States, through its agents,
informed said company that it was not
qualified to receive an award at the project
for the poorly completed projects it awarded
to third parties. The company sued petitioner
for specific performance and if no longer
possible, for damages. It also asked for a writ
of preliminary injunction to restrain the
defendants from entering into contracts with
others. The United States entered a special
appearance for the purpose only of
questioning the jurisdiction of the court over
the subject matter of the complaint and the
persons of the defendants, the subject matter
of the complaint being acts and omissions of
the individual defendants as agents of the
defendant United States of America, a foreign
sovereign which has not given its consent to
this suit or any other suit for the cause of
action asserted in the complaint. US filed a
motion to dismiss and opposed the writ. The
trial court denied the motion and issued a
writ.
ISSUE: Whether or not the US may be sued?
HELD:
No. The traditional rule of State immunity
exempts a State from being sued in the courts
of another State without its consent or waiver.
This rule is a necessary consequence of the
principles of independence and equality of
States. However, the rules of International Law
are not petrified; they are constantly
developing and evolving. And because the
activities of states have multiplied, it has been
necessary to distinguish them — between
sovereign and governmental acts (jure imperii)
and private, commercial and proprietary acts
(jure gestionis). The result is that State
immunity now extends only to acts jure imperii.
The restrictive application of State immunity
is now the rule in the United
States, the United Kingdom and other states
in western Europe. (See Coquia and DefensorSantiago, Public International Law, pp. 207209 [1984].)
The restrictive application of state
immunity is proper only when the
proceedings arise out of commercial
transactions of the foreign sovereign, its
commercial activities or economic affairs.
Stated differently, a state may be said to have
descended to the level of an individual and
can be thus deemed to have tacitly given its
consent to be sued only when the contract
relates to the exercise of its sovereign
functions.
In this case, the projects are an integral part
of the naval base which is devoted to the
defense of both the US and the Philippines,
undisputed a function of the government of
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the highest order, they are not utilized for nor
dedicated to commercial or business
purposes. The correct test for the
application of State immunity is not the
conclusion of a contract by a State but the
legal nature of the act is shown in Syquia vs.
Lopez, 84 Phil. 312 (1949). In that case the
plaintiffs leased three apartment buildings to
the United States of America for the use of its
military officials. The plaintiffs sued to
recover possession of the premises on the
ground that the term of the leases had
expired, They also asked for increased rentals
until the apartments shall have been vacated.
FROM NACHURA:
When the State enters into a business
contract. See: U.S. v. Ruiz, 136 SCRA 487,
where the Supreme Court distinguished
between contracts entered into by the State in
jure imperii (sovereign acts) and in jure
gestionis (commercial or proprietary acts).
Where the contract is in pursuit of a
sovereign activity, there is no waiver of
immunity, and no implied consent may be
derived therefrom.
In U. S. v. Ruiz, it was held that the contract for
the repair of wharves was a contract in jus
imperii, because the wharves were to be used
in national defense, a governmental function.
In JUSMAG Phil. v. NLRC, 239 SCRA 224, the
engagement of the services of private
respondent was held to be performance of a
governmental function by JUSMAG, on behalf
of the United States.
Accordingly, JUSMAG may not be sued under
such a contract. In Republic of Indonesia v.
Vinzon, G.R. No. 154705, June 26, 2003, it was
held that contracts entered into by a
sovereign state in connection with the
establishment of a diplomatic mission,
including contracts for the upkeep or
maintenance of air conditioning units,
generator sets, electrical facilities, water
heaters and water motor pumps of the
embassy and the Ambassador’s residence, are
contracts in jure imperii. The fact that the
contract contains a provision that any legal
action arising out of the agreement shall be
settled according to the laws of the
Philippines and by a specified court of the
Philippines does not necessarily mean a
waiver of the state’s sovereign immunity from
suit.
Similarly, in a companion case, U.S. v. Rodrigo,
a contract for restaurant services within the
Camp John Hay Air Station was likewise held
commercial in character.
Note, however, that in Republic v.
Sandiganbayan, 204 SCRA 212, the Court held
that even if, in exercising the power of
eminent domain, the State exercises a power
jus imperii, as distinguished from its
proprietary right of jus gestionis, where
property has been taken without just
compensation being paid, the defense of
immunity from suit cannot be set up in an
action for payment by the owner. See
Amigable v. Cuenca, 43 SCRA 360.
In Republic (PCGG) v. Sandiganbayan, G.R. No.
129406, March 6, 2006, 227 shares in Negros
Occidental Golf and Country Club, Inc.
(NOGCCI) owned and registered in the name
of private respondent Benedicto were
sequestered and taken over by PCGG fiscal
agents. In a suit for payment of dues of the
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sequestered shares, PCGG raised, among
others, the defense of immunity from suit.
The Supreme Court held that by entering into
a Compromise Agreement with Benedicto, the
Republic stripped itself of its immunity and
placed itself in the same level as its adversary.
When the State enters into a contract through
its officers or agents, in furtherance of a
legitimate aim and purpose and pursuant to
constitutional legislative authority, whereby
mutual or reciprocal benefits accruse and
rights and obligations arise therefrom, the
State may be sued even without its express
consent, precisely because by entering into a
contract, the sovereign descends to the level
of the citizen.
THE HOLY SEE VS. DEL ROSARIO JR
238 SCRA 524 (1994)
CASE DOCTRINE: PROCEDURE IN INVOKING
STATE IMMUNITY BY FOREIGN STATES. - In
Public International Law, when a state or
international agency wishes to plead
sovereign or diplomatic immunity in a foreign
court, it requests the Foreign Office of the
state where it is sued to convey to the court
that said defendant is entitled to immunity.
In the United States, the procedure followed
is the process of "suggestion," where the
foreign state or the international organization
sued in an American court requests the
Secretary of State to make a determination as
to whether it is entitled to immunity. If the
Secretary of State finds that the defendant is
immune from suit, he, in turn, asks the
Attorney General to submit to the court a
"suggestion" that the defendant is entitled to
immunity. In England, a similar procedure is
followed, only the Foreign Office issues a
certification to that effect instead of
submitting a "suggestion" (O'Connell, I
International Law 130 [1965]; Note:
Immunity from Suit of Foreign Sovereign
Instrumentalities and Obligations, 50 Yale
Law Journal 1088 [1941]).
In the Philippines, the practice is for the
foreign government or the international
organization to first secure an executive
endorsement of its claim of sovereign or
diplomatic immunity. But how the Philippine
Foreign Office conveys its endorsement to the
courts varies. In International Catholic
Migration Commission v. Calleja, 190 SCRA
130 (1990), the Secretary of Foreign Affairs
just sent a letter directly to the Secretary of
Labor and Employment, informing the latter
that the respondent- employer could not be
sued because it enjoyed diplomatic immunity.
In World Health Organization v. Aquino, 48
SCRA 242 (1972), the Secretary of Foreign
Affairs sent the trial court a telegram to that
effect. In Baer v. Tizon, 57 SCRA 1 (1974), the
U.S. Embassy asked the Secretary of Foreign
Affairs to request the Solicitor General to
make, in behalf of the Commander of the
United States Naval Base at Olongapo City,
Zambales, a "suggestion" to respondent Judge.
The Solicitor General embodied the
"suggestion" in a Manifestation and
Memorandum as amicus curiae.
TWO
CONFLICTING
CONCEPTS
OF
SOVEREIGN IMMUNITY. - There are two
conflicting concepts of sovereign immunity,
each widely held and firmly established.
According to the classical or absolute theory,
a sovereign cannot, without its consent, be
made a respondent in the courts of another
sovereign. According to the newer or
restrictive theory, the immunity of the
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sovereign is recognized only with regard to
public acts or acts jure imperii of a state, but
not with regard to private acts or acts jure
gestionis (United States of America v. Ruiz,
136 SCRA 487 [1987]; Coquia and DefensorSantiago, Public International Law 194
[1984]).
In the absence of legislation defining what
activities and transactions shall be considered
"commercial" and as constituting acts jure
gestionis, we have to come out with our own
guidelines, tentative they may be.
Certainly, the mere entering into a contract by
a foreign state with a private party cannot be
the ultimate test. Such an act can only be the
start of the inquiry. The logical question is
whether the foreign state is engaged in the
activity in the regular course of business. If
the foreign state is not engaged regularly in a
business or trade, the particular act or
transaction must then be tested by its nature.
If the act is in pursuit of a sovereign activity,
or an incident thereof, then it is an act jure
imperii, especially when it is not undertaken
for gain or profit.
REMEDY OF THE COMPLAINANTS WHEN
THE STATE IMMUNITY IS INVOKED. Private respondent is not left without any
legal remedy for the redress of its grievances.
Under both Public International Law and
Transnational Law, a person who feels
aggrieved by the acts of a foreign sovereign
can ask his own government to espouse his
cause through diplomatic channels.
Private respondent can ask the Philippine
government, through the Foreign Office, to
espouse its claims against the Holy See. Its
first task is to persuade the Philippine
government to take up with the Holy See the
validity of its claims. Of course, the Foreign
Office shall first make a determination of the
impact of its espousal on the relations
between the Philippine government and the
Holy See (Young, Remedies of Private
Claimants Against Foreign States, Selected
Readings on Protection by Law of Private
Foreign Investments 905, 919 [1964]). Once
the Philippine government decides to espouse
the claim, the latter ceases to be a private
cause.
According to the Permanent Court of
International Justice, the forerunner of the
International Court of Justice:
"By taking up the case of one of its subjects
and by reporting to diplomatic action or
international judicial proceedings on his
behalf, a State is in reality asserting its own
rights — its right to ensure, in the person of
its subjects, respect for the rules of
international
law
(The
Mavrommatis
Palestine Concessions, 1 Hudson, World Court
Reports 293, 302 [1924]).
THE HOLY SEE VS. DEL ROSARIO JR
FACTS:
Lot 5-A is registered under the name of the
petitioner The Holy See. This lot is contiguous
to lots 5-B and 5-D registered in the name of
Philippine Realty Corporation (PRC). These
three lots were sold through an agent Msgr.
Domingo Cirilos Jr. to Ramon Licup. Licup
assigned his rights to private respondent
Starbright Sales Ent. Inc. (SSEI). Due to refusal
of the squatters to vacate the lots, a dispute
arose as to who of the parties has the
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responsibility of eviction and clearing the
land. SSEI insists that petitioner should clear
the property of the squatters. Petitioner
refused and proposed that either SSEI
undertake the eviction or that the earnest
money be returned. Msgr. Cirilos returned the
P100,000.00 earnest money, and the property
was sold to Tropicana
theory, the immunity of the sovereign is
recognized only with regard to public acts or
acts jure imperii of a state, but not with
regard to private acts or acts jure gestionis
(United States of America v. Ruiz, 136 SCRA
487 [1987]; Coquia and Defensor-Santiago,
Public International
Law 194 [1984]).
Properties and Development Corporation
(Tropicana). SSEI filed suit for annulment of
sale, specific performance and damages
against Msgr. Cirilos, PRC, and Tropicana.The
petitioner and Msgr. Cirilos moved to dismiss
for lack of jurisdiction based on sovereign
immunity from suit. It was denied on the
ground that petitioner “shed off its sovereign
immunity by entering into the
business contract” in question.A motion for
reconsideration was also denied. Hence, this
special civil action for certiorari.
The restrictive theory, which is intended to
be a solution to the host of problems
involving the issue of sovereign immunity,
has created problems of its own. Legal
treatises and the decisions in countries which
follow the restrictive theory have difficulty in
characterizing whether a contract of a
sovereign state with a private party is an act
jure gestionis or an act jure imperii. The
restrictive theory came about because of the
entry of sovereign states into purely
commercial activities remotely connected
with the discharge of governmental functions.
This is particularly true with respect to the
Communist states which took control of
nationalized
business
activities
and
international trading. This Court has
considered the following transactions by a
foreign state with private parties as acts jure
imperii:
ISSUE: Did the Holy See properly invoke
sovereign immunity for its non-suability?
HELD:
YES. In the case at bar, lot 5-A was acquired as
a donation from the archdiocese of Manila for
the site of its mission or the Apostolic
Nuniciature in the Philippines. The
subsequent disposal was made because the
squatters living thereon made it impossible
for petitioner to use it for the purpose of the
donation. Petitioner did not sell lot 5-A for
profit or gain. There are two conflicting
concepts of sovereign immunity, each widely
held and firmly established. According to the
classical or absolute theory, a sovereign
cannot, without its consent, be made a
respondent in the courts of another sovereign.
According to the newer or restrictive
(1) the lease by a foreign government of
apartment buildings for use of its military
officers
(Syquia v. Lopez, 84 Phil. 312 [1949];
(2) the conduct of public bidding for the
repair of a wharf at a United States Naval
Station (United States of America v. Ruiz,
supra.); and
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(3) the change of employment status of base
employees (Sanders v. Veridiano, 162 SCRA
88 [1988]).
On the other hand, this Court has considered
the following transactions by a foreign state
with private parties as acts jure gestionis:
(1) the hiring of a cook in the recreation
center, consisting of three restaurants, a
cafeteria, a bakery, a store, and a coffee and
pastry shop at the John Hay Air Station in
Baguio City, to cater to American servicemen
and the general public (United States of
America v. Rodrigo, 182 SCRA
644 [1990]); and
(2) the bidding for the operation of barber
shops in Clark Air Base in Angeles City
(United States of America v. Guinto, 182 SCRA
644 [1990]). The operation of the restaurants
and other facilities open to the general public
is undoubtedly for profit as a commercial and
not a governmental activity. By entering into
the employment contract with the cook in the
discharge of its proprietary function, the
United States government impliedly divested
itself of its sovereign immunity from suit.
In the absence of legislation defining what
activities and transactions shall be considered
"commercial" and as constituting acts jure
gestionis, we have to come out with our own
guidelines, tentative they may be. Certainly,
the mere entering into a contract by a foreign
state with a private party cannot be the
ultimate test. Such an act can only be the start
of the inquiry. The logical question is whether
the foreign state is engaged in the activity in
the regular course of business. If the foreign
state is not engaged regularly in a business or
trade, the particular act or transaction must
then be tested by its nature. If the act is in
pursuit of a sovereign activity, or an incident
thereof, then it is an act jure imperii,
especially when it is not undertaken for gain
or profit. As held in United States of America v.
Guinto, (supra): "There is no question that the
United States of America, like any other state,
will be deemed to have impliedly waived its
non-suability if it has entered into a contract
in its proprietary or private capacity. It is only
when the contract involves its sovereign or
governmental capacity that no such waiver
may be implied."
In the case at bench if petitioner has bought
and sold lands in the ordinary course of a real
estate business, surely the said transaction
can be categorized as an act jure gestionis.
However, petitioner has denied that the
acquisition and subsequent disposal of Lot 5A were made for profit but claimed that it
acquired said property for the site of its
mission or the Apostolic Nunciature in the
Philippines. Private respondent failed to
dispute said claim.
Under Art.31(A) of the 1961 Vienna
Convention on Diplomatic Relations, a
diplomatic envoy is granted immunity from
the civil and administrative jurisdiction of the
receiving state over any real action relating to
private immovable property situated in the
territory of the receiving state which the
envoy holds on behalf of the sending state for
the purposes of the mission. If this immunity
is provided for a diplomatic envoy with all the
more reason should immunity be recognized
as regards the sovereign itself, which in this
case is the Holy See.
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Moreover the Department of the Foreign
Affairs has formally intervened and officially
certified that the Embassy of the Holy See is a
duly accredited diplomatic missionary to the
Republic of the Philippines and as such is
exempt from local jurisdiction and entitled to
all the rights, privileges and immunities of a
diplomatic mission or embassy in this court.
The determination of the executive arm of the
government that a state or instrumentality is
entitled to sovereign or diplomatic immunity
is a political question that is conclusive upon
the courts. Where the plea of immunity is
reacquired and affirmed by the executive
branch, it is the duty of the courts to accept
this claim so as not to embarrass the
executive arm of the government in
conducting the country’s foreign relations.
HOW ABOUT FOREIGN STATES, CAN THEY
ALSO EXERCISE IMMUNITY FROM SUIT?
-
-
-
YES. By virtue of the latin maxim “ par
in parem non habet imperium” which
means that an equal has no authority
over the equal.
Immunity from suit also applies to
officers of foreign state.
A foreign agent, operating within a
territory, can be cloaked with
immunity from suit but only as long as
it can be established that he is acting
within the directives of the sending
State. The cloak of protection is
removed the moment the foreign
agent is sued in his individual capacity,
as when he is sought to be made liable
for whatever damage he may have
caused by his act done with malice or
in bad faith or beyond the scope of his
authority or jurisdiction.
-
In Minucherv. Court of Appeals, G.R. No.
142396, February 11, 2003, it was
sufficiently
established
that
respondent Arthur Scalzo an agent of
the US Drug Enforcement Agency, was
tasked to conduct surveillance on
suspected drug activities within the
country, and having ascertained the
target, to inform the local law
enforcers who would then be
expected to make the arrest. In
conducting this surveillance and later,
acting as the poseur- buyer during the
buy-bust
operation,
and
then
becoming a principal witness in the
criminal case against Minucher, Scalzo
can hardly be said to have acted
beyond the scope of his official
functions or duties. He should,
therefore, be accorded diplomatic
immunity.
HOW CAN FOREIGN STATE INVOKE STATE
IMMUNITY?
- There are three ways:
1. Suggestion
2. Department of Foreign Affairs
3. Letter or manifestation.
Note: The Philippines has no formal
procedure.
THE UNITED NATIONS, as well as its organs
and specialized agencies, are likewise beyond
the jurisdiction of local courts [Convention on
Privileges and Immunities of the United
Nations; Convention on Privileges and
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Immunities of Specialized Agencies of the
United Nations; World Health Organization v.
Aquino, supra.].
WHAT IS CA 3083?
ACT NO. 3083
- The invocation by private respondents of
the doctrine of estoppel is unavailing, because
estoppel does not confer jurisdiction on a
tribunal that has none over a cause of action.
The Tijam v. Sibonghanoy, 23 SCRA 29, ruling
cannot apply to parties which enjoy foreign
and
diplomatic
immunity
[SEAFDECAquaculture v. NLRC, 206 SCRA 283].
WHAT IS THE REMEDY OF PRIVATE
CITIZEN AGAINST FOREIGN STATE?
- The state will lobby the claim through
diplomatic channels (holy see)
- Doctrine of State Immunity- Foreign
State invokes immunity
- What is the remedy -( Party can ask
the Philippine Government through
Foreign Office to espouse its claims. ( Executive department to raise the
issue).
WHAT ARE THE FORMS OF EXPRESS
CONSENT?
-
There are two (2) forms:
1. General Law: CA3083; CA 327
2. Special Law – See Merritt Case
NOTE: If the foreign state does not consent,
wala na magagawa.
AN ACT DEFINING THE CONDITIONS UNDER
WHICH THE GOVERNMENT OF THE
PHILIPPINE ISLANDS MAY BE SUED
SECTION 1. Complaint
against
Government. — Subject to the provisions of
this Act, the Government of the Philippine
Islands hereby consents and submits to be
sued upon any moneyed claim involving
liability arising from contract, expressed or
implied, which could serve as a basis of civil
action between private parties.
SECTION 2. A person desiring to
avail himself of the privilege herein conferred
must show that he has presented his claim to
the Insular Auditor i[i]1 and that the latter
did not decide the same within two months
from the date of its presentation.
SECTION 3. Venue. — Original
actions brought pursuant to the authority
conferred in this Act shall be instituted in the
Court of First Instance of the City of Manila
or of the province were the claimant resides,
at the option of the latter, upon which court
exclusive original jurisdiction is hereby
conferred to hear and determine such actions.
cdpr
SECTION 4. Actions instituted as
aforesaid shall be governed by the same rules
of procedure, both original and appellate, as
if the litigants were private parties.
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SECTION 5. When the Government
of the Philippine Island is plaintiff in an
action instituted in any court of original
jurisdiction, the defendant shall have the
right to assert therein, by way of set-off or
counterclaim in a similar action between
private parties.
SECTION 6. Process in actions
brought against the Government of the
Philippine Islands pursuant to the authority
granted in this Act shall be served upon the
Attorney-General ii[ii]2 whose duty it shall be
to appear and make defense, either himself
or through delegates.
SECTION 7. Execution.
—
No
execution shall issue upon any judgment
rendered by any court against the
Government of the Philippine Islands under
the provisions of this Act; but a copy thereof
duly certified by the clerk of the Court in
which judgment is rendered shall be
transmitted by such clerk to the GovernorGeneral, iii[iii]3 within five days after the
same becomes final.
SECTION 8. Transmittal of Decision.
— The Governor-General, iv [iv]4 at the
commencement of each regular session of the
Legislature, v[v]5 shall transmit to that body
for appropriate action all decisions so
received by him, and if said body determine
that payment should be made, it shall
appropriate the sum which the Government
has been sentenced to pay, including the
same in the appropriations for the ensuing
year.
SECTION 9. This Act shall take
effect on its approval.
Approved, March 16, 1923.
WHAT IS THE NATURE OF THE CONTRACT?
-
It may be sovereign, meaning there is
implied consent; it may also be
proprietary in nature which means no
consent.
IS THERE ANYTHING IN THE LAW THAT
IMPLIES
CONSENT
ONLY
IF
THE
CONTRACTS PERTAIN TO PROPRIETARY
FUNCTIONS?
-
Yes. Which could serve as a basis for
civil action between private parties.
CA 327
AN ACT FIXING THE TIME WITHIN WHICH
THE AUDITOR GENERAL SHALL RENDER HIS
DECISIONS AND PRESCRIBING THE MANNER
OF APPEAL THEREFROM
Section 1. In all cases involving the settlement
of accounts or claims, other than those of
accountable officers, the Auditor General shall
act and decide the same within sixty days,
exclusive of Sundays and holidays, after their
presentation. If said accounts or claims need
reference to other persons, office or offices, or
to a party interested, the period aforesaid shall
be counted from the time the last comment
necessary to a proper decision is received by
him. With respect to the accounts of
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accountable officers, the Auditor General shall
act on the same within one hundred days after
their submission, Sundays and holidays
excepted.
In case of accounts or claims already submitted
to but still pending decision by the Auditor
General on or before the approval of this Act,
the periods provided in this section shall
commence from the date of such approval.
Section 2. The party aggrieved by the final
decision of the Auditor General in the
settlement of an account for claim may, within
thirty days from receipt of the decision, take an
appeal in writing:
(a) To the President of the United States,
pending the final and complete withdrawal of
her sovereignty over the Philippines, or
(b) To the President of the Philippines, or
(c) To the Supreme Court of the Philippines if
the appellant is a private person or entity.
If there are more than one appellant, all
appeals shall be taken to the same authority
resorted to by the first appellant.
From a decision adversely affecting the
interests of the Government, the appeal may be
taken by the proper head of the department or
in case of local governments by the head of the
office or branch of the Government
immediately concerned.
The appeal shall specifically set forth the
particular action of the Auditor General to
which exception is taken with the reasons and
authorities relied on for reversing such
decision.
Section 3. This Act shall take effect upon its
approval.
Approved, June 18, 1938.
-
Express consent through the act of
the LEGISLATIVE BODY – See
Republic vs. Feliciano
sua
TYPES OF IMPLIED CONSENT:
- Commences
litigation
to
seek
affirmative relies
- Enters into a contract in its
proprietary capacity
WHAT ARE THE DIFFERENCE OF
SUIABILITY
BASED
ON
THE
PERFORMANCE
OF
PROPRIETARY
FUNCTIONS AND SUABILITY BASED IN
ENTERING IN TO A CONTRACT IN
PROPRIETARY CAPACITY?
- The latter ids more appropriate and
applicable
to
foreign
states.
(restrictive theory; see case of holy
see)
SUABILITY
IS
DIFFERENT
FROM
LIABILITY; UP TO WHAT STAGE DOES TE
WAIVER OPERATES?
- Up to the rendition of judgment
WHY
DOES
EXECUTION
REQUIRE
ANOTHER WAIVER?
- General Rule: Public funds can only be
issues upon appropriation
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-
Exception: Public funds may be
garnished
whom
specifically
earmarked for the judgment.
HYPO: A and B; A won and B has money in
a government agency, May such money be
garnished?
- No. In that case, the government
becomes a FORCED INTERVENOR.
What cannot be done directly cannot
be done indirectly (PNB vs.
PABALAN)
WHAT ARE THE TEST TO DETERMINE IF
SUIT IS AGAINST THE STATE?
- On the assumption that decision is
rendered against the public officer or
agency
impleaded,
will
the
enforcement thereof require an
affirmative act from the State, such as
the appropriation of the needed
amount to satisfy the judgment? If so,
then it is a suit against the State. See:
Sanders v. Veridiano, 162 SCRA 88;
Republic v. Feliciano, 148 SCRA 424.
-
Tan v. Director of Forestry, 125 SCRA
302, the Supreme Court said that State
immunity from suit may be invoked as
long as the suit really affects the
property, rights or interests of the
State and not merely those of the
officers nominally made party
defendants. In this case, the Court said
that the promotion of public welfare
and the protection of the inhabitants
near the public forest are property
rights and interests of the State. In
Veterans Manpower and Protective
Services, Inc. v. Court of Appeals, 214
SCRA 286, the suit for damages filed
against the PC Chief and the PC-SUSIA
would require an affirmative act of
appropriation should damages be
awarded, and is, therefore, a suit
against the State.
FROM NACHURA:
Scope of Consent. Consent to be sued does
not include consent to the execution of
judgment against it.
a) Such execution will require another waiver,
because the power of the court ends when the
judgment is rendered, since government
funds and properties may not be seized under
writs of execution or garnishment, unless
such,disbursement is covered by the
corresponding appropriation as required by
law [Republic v. Villasor, 54 SCRA 84;
Department of Agriculture v. NLRC, 227 SCRA
693].
Thus, in Larkins v. NLRC, 241 SCRA 598,
considering that the employer of private
respondents was not Lt. Col. Frankhauser or
the petitioner but the U.S. Government which,
by right of sovereign power, operated and
maintained the dormitories at the Clark Air
Base for USAF members, the awards (of
monetary claims to the private respondents)
will have to be satisfied by the U.S.
Government. Without its consent the
properties of the U.S. Government may not be
subject to execution.
b) But funds belonging to government
corporations (whose charters provide that
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they can sue and be sued) that are deposited
with a bank are not exempt from garnishment
[Philippine National Bank v. Pabalan, 83 SCRA
595; Rizal Commercial Bank v. De Castro, 168
SCRA 49]. In National Housing Authority v.
Heirs of Quivelondo, G.R. No. 154411, June 19,
2003, it was held that if the funds belong to a
public corporation or a government- owned
or controlled corporation which is clothed
with a personality of its own, then the funds
are not exempt from garnishment. This is so
because when the government enters into
commercial business, it abandons its
sovereign capacity and is to be treated like
any other corporation. NHA is one such
corporation; thus, its funds are not exempt
from garnishment or execution.
i) However, in Municipality of San Miguel,
Bulacan v. Fernandez, 130 SCRA 56, it was
held that funds of a municipality (although it
is an incorporated agency whose charter
provides that it can sue and be sued) are
public in character and may not be garnished
unless there is a corresponding appropriation
ordinance duly passed by the Sangguniang
Bayan. Thus, in City of Caloocan v. Allarde, G.R.
No. 107271, September 10, 2003, the rule was
reiterated that all government funds
deposited with any official depositary bank of
the Philippine Government by any of its
agencies or instrumentalities, whether by
general
or
special
deposit,
remain
government funds and may not be subject to
garnishment or levy in the absence of a
corresponding appropriation as required by
law. In this case, the City of Caloocan had
already approved and passed Ordinance No.
0134, Series of 1992, allocating the amount of
P439.377.14 for respondent Santiago’s back
salaries plus interest. Thus, this case fell
squarely within the exception, and the
amount may therefore be garnished.
ia) Be that as it may, in Municipality of Makati
v. Court of Appeals, 190 SCRA 206, it was held
that where the municipality fails or refuses,
without justifiable reason, to effect payment
of a final money judgment rendered against it,
the claimant may avail of the remedy of
mandamus in order to compel the enactment
and approval of the necessary appropriation
ordinance
and
the
corresponding
disbursement of municipal funds to satisfy
the money judgment.
c) In Pacific Products v. Ong, 181 SCRA 536, the
Supreme Court said that by the process of
garnishment, the plaintiff virtually sues the
garnishee for a debt due from the defendant.
The debtor-stranger becomes a forced
intervenor; when served with the writ of
attachment, he becomes a party to the action.
Money in the hands of government agency
(engaged in governmental functions), even if
due to a third party, is not liable to creditors
of the third party through garnishment. To
allow this would be to allow a suit against the
State without the latter’s consent.
Suability not equated with outright liability.
Liability will have to be determined by the
Court
on the basis of the evidence and the
applicable law.
a) In Merritt v. Government of the Philippine
Islands, supra., while consent to be sued was
granted through a special law, the
government was held not liable for damages,
because under the attendant circumstances
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the government was not acting through a
special agent.
b) In Fontanilla v. Maliaman, 194 SCRA 486,
the Supreme Court said that the National
Irrigation Administration is a government
agency with a juridical personality separate
and distinct from the government; it is a
corporate body performing proprietary
functions. Thus, the NIA may be held liable for
damages caused by the negligent act of its
driver who was not a special agent.
This was reiterated in National Irrigation
Administration v. Court of Appeals, 214 SCRA
35.
REPUBLIC VS. VILLASOR
54 SCRA 84 (1973)
CASE
DOCTRINE:
FUNDS
OF
THE
GOVERNMENT ARE NOT SUBJECT TO
GARNISHMENT. – It is a fundamental
postulate of constitutionalism flowing from
the juristic concept of sovereignty that the
state as well as its government is immune
from suit unless it gives its consent. It is
readily understandable why it must be so. In
the classic formulation of Holmes: "A
sovereign is exempt from suit, not because of
any formal conception or obsolete theory, but
on the logical and practical ground that there
can be no legal right as against the authority
that makes the law on which the right
depends." Sociological jurisprudence supplies
an answer not dissimilar. So it was indicated
in a recent decision, Providence Washington
Insurance Co. v. Republic of the Philippines,
with its affirmation that "a continued
adherence to the doctrine of non-suability is
not to be deplored for as against the
inconvenience that may be caused private
parties, the loss of governmental efficiency
and the obstacle to the performance of its
multifarious functions are far greater if such a
fundamental principle were abandoned and
the availability of judicial remedy were not
thus restricted. With the well known
propensity on the part of our people to go to
court, at the least provocation, the loss of time
and energy required to defend against law
suits, in the absence of such a basic principle
that constitutes such an effective obstacle,
could very well be imagined."
This fundamental postulate underlying the
1935 Constitution is now made explicit in the
revised charter. It is therein expressly
provided: "The State may not be sued without
its consent." A corollary, both dictated by
logic and sound sense from such a basic
concept is that public funds cannot be the
object of a garnishment proceeding even if
the consent to be sued had been previously
granted and the state liability adjudged. Thus
in the recent case of Commissioner of Public
Highways v. San Diego, such a well-settled
doctrine was restated in the opinion of Justice
Teehankee: "The universal rule that where
the State gives its consent to be sued by
private parties either by general or special
law, it may limit claimant's action `only up to
the completion of proceedings anterior to the
stage of execution' and that the power of the
Courts ends when the judgment is rendered,
since government funds and properties may
not be seized under writs of execution or
garnishment to satisfy such judgments, is
based on obvious considerations of public
policy. Disbursements of public funds must be
covered by the corresponding appropriation
as required by law. The functions and public
services rendered by the State cannot be
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allowed to be paralyzed or disrupted by the
diversion of public funds from their
legitimate
and
specific
objects,
as
appropriated by law." Such a principle applies
even to an attempted garnishment of a salary
that had accrued in favor of an employee.
Director of Commerce and Industry v.
Concepcion, speaks to that effect. Justice
Malcolm as ponente left no doubt on that
score. Thus: "A rule, which has never been
seriously questioned, is that money in the
hands of public officers, although it may be
due government employees, is not liable to
the creditors of these employees in the
process of garnishment. One reason is, that
the State, by virtue of its sovereignty, may not
be sued in its own courts except by express
authorization by the Legislature, and to
subject its officers to garnishment would be
to permit indirectly what is prohibited
directly. Another reason is that moneys
sought to be garnished, as long as they remain
in the hands of the disbursing officer of the
Government, belong to the latter, although
the defendant in garnishment may be entitled
to a specific portion thereof. And still another
reason which covers both of the foregoing is
that every consideration of public policy
forbids it."
REPUBLIC VS. VILLASOR
FACTS:
A decision was rendered in a Special
Proceeding against the Republic of the
Philippines
thereby
confirming
the
arbitration award of P1,712,396.40 in favor of
respondent corporation. After the decision
became final and executory, respondent judge
issued an order directing the sheriff to
execute the said decision, and the
corresponding alias writ of execution was
thus issued. Hence the sheriff served notices
of garnishment with several banks especially
the monies due to the AFP in the form of
deposits sufficient to cover the amount
mentioned in the writ. PNB and Philippine
Veterans Bank received such notice. As
certified by the AFP Comptroller, these funds
of the AFP with the said banks are public
funds for the pensions, pay, and allowances of
its military and civilian personnel.
The petitioner, in this certiorari and
prohibition proceedings, challenges the
validity of the Order issued by Judge Villasor
declaring the decision final and executory and
subsequently issuing an alias writ of
execution directed against the funds of the
AFP in pursuance thereof.
ISSUE:
May the writs of execution and notices of
garnishment be sued against public funds?
HELD:
NO. Although the State may give its consent to
be sued by private parties, there is corollary
that public funds cannot be the object of
garnishment proceedings even if the consent
to be sued has been previously granted and
the state’s liability has been adjudged.
Thus in the case of Commission of Public
Highways vs. San Diego, such a well-settled
doctrine was restated in the opinion of Justice
Teehankee. The universal rule that where the
state gives its consent to be sued by private
parties either by general or special law, it may
limit claimant’s action only up to the
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completion of proceedings anterior to the
stage of execution and that the power of the
courts ends when the judgment is rendered,
since the government funds and properties
may not be seized under writs of execution or
garnishment to satisfy such judgment, is
based on obvious considerations of public
policy. Disbursement of public funds must be
covered by the corresponding appropriations
as required by law. The functions and public
services rendered by the State cannot be
allowed to be paralyzed or disrupted by
diversion of public funds from their
legitimate and specific object is appropriated
by law.
DEPARTMENT OF AGRICULTURE VS. NLRC
227 SCRA 693 (1993)
CASE DOCTRINE: FORMS OF WAIVER OF
IMMUNITY. - The basic postulate enshrined in
the constitution that "(t)he State may not be
sued without its consent," reflects nothing
less than a recognition of the sovereign
character of the State and an express
affirmation of the unwritten rule effectively
insulating it from the jurisdiction of courts. It
is based on the very essence of sovereignty.
As has been aptly observed, by Justice Holmes,
a sovereign is exempt from suit, not because
of any formal conception or obsolete theory,
but on the logical and practical ground that
there can be no legal right as against the
authority that makes the law on which the
right depends. True, the doctrine, not too
infrequently, is derisively called "the royal
prerogative of dishonesty" because it grants
the state the prerogative to defeat any
legitimate claim against it by simply invoking
its non-suability. We have had occasion to
explain in its defense, however, that a
continued adherence to the doctrine of nonsuability cannot be deplored, for the loss of
governmental efficiency and the obstacle to
the performance of its multifarious functions
would be far greater in severity than the
inconvenience that may be caused private
parties, if such fundamental principle is to be
abandoned and the availability of judicial
remedy is not to be accordingly restricted.
The rule, in any case, is not really absolute for
it does not say that the state may not be sued
under any circumstance. On the contrary, as
correctly phrased, the doctrine only conveys,
"the state may not be sued without its
consent;" its clear import then is that the
State may at times be sued. The States'
consent may be given either expressly or
impliedly. Express consent may be made
through a general law or a special law. In this
jurisdiction, the general law waiving the
immunity of the state from suit is found in Act
No. 3083, where the Philippine government
"consents and submits to be sued upon any
money claim involving liability arising from
contract, express or implied, which could
serve as a basis of civil action between private
parties." Implied consent, on the other hand,
is conceded when the State itself commences
litigation, thus opening itself to a
counterclaim or when it enters into a contract.
In this situation, the government is deemed to
have descended to the level of the other
contracting party and to have divested itself
of its sovereign immunity. This rule, relied
upon by the NLRC and the private
respondents, is not, however, without
qualification. Not all contracts entered into by
the government operate as a waiver of its
non-suability; distinction must still be made
between one which is executed in the exercise
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of its sovereign functions and another which
is done in its proprietary capacity.
PROCEDURE
IN
ENFORCING
THE
LIABILITY OF THE STATE. - But, be that as it
may, the claims of private respondents, i.e.,
for underpayment of wages, holiday pay,
overtime pay and similar other items, arising
from the Contract for Security Services,
clearly constitute money claims. Act No. 3083,
aforecited, gives the consent of the State to be
"sued upon any moneyed claim involving
liability arising from contract, express or
implied, . . ." Pursuant, however, to
Commonwealth Act ("C.A.") No. 327, as
amended by Presidential Decree ("P.D.") No.
1445, the money claim should first be
brought to the Commission on Audit. Thus, in
Carabao, Inc., vs. Agricultural Productivity
Commission, we ruled:
"(C)laimants
have
to
prosecute their money claims against
the
Government
under
Commonwealth Act 327, stating that
Act 3083 stands now merely as the
general law waiving the State's
immunity from suit, subject to its
general limitation expressed in
Section 7 thereof that 'no execution
shall issue upon any judgment
rendered by any Court against the
Government of the (Philippines), and
that the conditions provided in
Commonwealth Act 327 for filing
money claims against the Government
must be strictly observed.' "
We fail to see any substantial conflict or
inconsistency between the provisions of C.A.
No. 327 and the Labor Code with respect to
money claims against the State. The Labor
Code, in relation to Act No. 3083, provides the
legal basis for the State liability but the
prosecution, enforcement or satisfaction
thereof must still be pursued in accordance
with the rules and procedures laid down in
C.A. No. 327, as amended by P.D. 1445.
When the State gives its consent to be sued, it
does not thereby necessarily consent to an
unrestrained execution against it. Tersely put,
when the State waives its immunity, all it
does, in effect, is to give the other party an
opportunity to prove, if it can, that the State
has a liability. In Republic vs. Villasor, this
Court, in nullifying the issuance of an alias
writ of execution directed against the funds of
the Armed Forces of the Philippines to satisfy
a final and executory judgment, has explained,
thus —
The universal rule that where the State gives
its consent to be sued by private parties
either by general or special law, it may limit
claimant's action "only up to the completion
of proceedings anterior to the stage of
execution" and that the power of the Courts
ends when the judgment is rendered, since
government funds and properties may not be
seized under writs of execution or
garnishment to satisfy such judgments, is
based on obvious considerations of public
policy. Disbursements of public funds must be
covered by the corresponding appropriation
as required by law. The functions and public
services rendered by the State cannot be
allowed to be paralyzed or disrupted by the
diversion of public funds from their
legitimate
and
specific
objects,
as
appropriated by law.
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DEPARTMENT OF AGRICULTURE VS.
NLRC
FACTS:
The DAR and Sultan Security Agency entered
into a contract for security services to be
provided by the latter to the said
governmental entity. Several guards of the
agency assigned to the petitioner’s premises
filed a complaint for underpayment of wages,
non-payment of 13th month pay, uniform
allowances, night shift differential pay,
holiday pay, and overtime pay as well as for
damages, before the Regional Arbitration,
against the petitioner and the agency. The
Executive Labor arbiter rendered a decision
finding the petitioner and the agency jointly
and
severally liable for the payment of the money
claims. The decision became final and
executory. The Labor Arbiter then issued a
writ of execution which resulted in the
property of the petitioner being levied. The
petitioner asserts the rule of non-suability of
the State.
ISSUE:
Can the Department of Agriculture be sued
under the contract entered with the agency?
HELD:
YES. The basic postulate under Art. X section
3 of the Constitution that “the State may not
be sued without its consent” is not absolute
for it does not say that the State may not be
sued under any circumstances. On the
contrary, as correctly phrased, the doctrine
only conveys “that the State may not be sued
without its consent.” Its import then is that
the State may at times be sued. The State’s
consent may be given either expressly or
impliedly. Express consent may be made
through a general law waiving the immunity
of the State from suit which is found in Act
3083, where the Philippine government
“consents and submits to be sued upon any
money claim involving liability arising from
contract, express or implied, which could
serve as basis of civil action between private
parties.” Implied consent on the other hand, is
conceded when the State itself commences
litigation, thus opening itself to counterclaim
or when it enters into a contract.
In this situation, the government is deemed to
have descended to the level of the other
contracting party and to have divested itself
of its sovereign immunity. The rule relied
upon by the NLRC is not, however, without
qualification. Not all contracts entered into by
the government operate as a waiver of its
non-suability. Distinction must still be made
between one which was executed in the
exercise of its sovereign function and another
which is done in its proprietary capacity. In
the instant case, the petitioner has not
pretended to have assumed a capacity apart
from its being a governmental entity when it
entered into the questioned contract, not that
it could have in fact performed any act
proprietary in character, but be that as it may,
the claims of private respondents arising
from the contract for security services clearly
constitute money claims for which Act 3083
gives the consent of the state to be sued.
However, when the State gives its consent to
be sued, it does not thereby necessarily
consent to an unrestricted execution against
it. When the State waives immunity, all it does,
in effect, is to give the other party an
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opportunity to prove, if it can, that the state
has any liability.
PNB VS. PABALAN
83 SCRA 595 (1978)
CASE DOCTRINE:
DOCTRINE OF STATE IMMUNITY FROM
SUIT; A GOVERNMENT OWNED AND
CONTROLLED
CORPORATION
HAS
DISTINCT PERSONALITY OF ITS OWN;
FUNDS OF THE CORPORATE ENTITY MAY
BE PROCEEDED AGAINST.
The doctrine of non- suability cannot be
legally set forth as a bar or impediment to a
notice of garnishment. In National Shipyard
and Steel Corporation v. Court of Industrial
Relations, 118 Phil. 782 (1963), it was
explicitly stated: "That allegation to the effect
that the funds of the NASSCO are public funds
of the government, and that, as such the same
may not be garnished, attached or levied
upon, is untenable for, as a government
owned and controlled corporation, the
NASSCO has a personality of its own, distinct
and separate from that of the Government. It
has — pursuant to Section 2 of Executive
Order No. 356, dated October 23, 1950 . . .,
pursuant to which the NASSCO has been
established — "all the powers of a
corporation under the Corporation Law . . . "
Accordingly, it may sue and be sued and may
be subjected to court processes just like any
other corporation (Section 13, Act No. 1459,
as amended.)
PNB VS. PABALAN
FACTS:
A judgment was rendered against Philippine
Virginia Tobacco Administration (PVTA).
Judge Javier Pabalan issued a writ of
execution followed thereafter by a notice of
garnishment of the funds of respondent PVTA
which were deposited with the Philippine
National Bank (PNB). PNB objected on the
constitutional law doctrine of non-suability of
a state. It alleged that such funds are public in
character.
ISSUE: Was the contention of PNB correct?
HELD:
NO. It is to be admitted that under the present
Constitution, what was formerly implicit as a
fundamental doctrine in constitutional law
has been set forth in express terms: “The
State may not be sued without its consent.” If
the funds appertained to one of the regular
departments or
offices in the government, then, certainly such
a provision would lie a bar to garnishment.
Such is not the case here. Garnishment would
lie. The Supreme Court, in a case brought by
the same petitioner precisely invoking such
doctrine, left no doubt that the funds of a
public corporation
could properly be made the object of a notice
of garnishment. It is well settled that when
the government enters into commercial
business, its abandons its sovereign capacity
and is to be
treated like any other corporation. (Manila
Hotel Employees Association vs. Manila Hotel
Company)
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HYPO: A and B; A won and B has money in
a government agency, May such money be
garnished?
- No. In that case, the government
becomes a FORCED INTERVENOR.
What cannot be done directly cannot
be done indirectly (PNB vs.
PABALAN)
Writ of Garnishment (WOG) , Attachment
Can the courts issue a WOG against the funds
of incorporated
agencies?
NO. PNB vs. Pabalan
3[d].) As a government owned and controlled
corporation, it has a personality of its own,
distinct and separate from that of the
Government. (See National Shipyards and
Steel Corp. vs. CIR, et al., L-17874, August 31,
1963, 8 SCRA 781.) Moreover, the charter
provision that the NPC can "sue and be sued
in any court" is without qualification on the
cause of action and accordingly it can include
a tort claim such as the one instituted by
petitioners.
How about unincorporated agency, are
they entitled to DSI?
- Yes, as to sovereign acts
Can UA impliedly waive their immunity?
- Yes
RAYO VS. CFI OF BULACAN
RAYO VS. CFI OF BULACAN
110 SCRA 460 (1981)
The many unfortunate victims of the mancaused flood filed with the respondent court
eleven complaints for damages against the
NPC and Benjamin Chavez. NPC filed separate
answers to each of the eleven complaints and
invoked in each answer a special and
affirmative defense that in the operation of
the Angat Dam, it is performing a purely
governmental function. Hence, it cannot be
sued without the express consent of the State.
The respondent court dismissed the case on
the grounds that said defendant performs a
purely governmental function in the
operation of the Angat Dam and cannot
therefore be sued for damages in the instant
cases in connection therewith.
CASE DOCTRINE: GOVERNMENT OWNED
AND CONTROLLED CORPORATION HAS A
SEPARATE PERSONALITY INDEPENDENT OF
THE GOVERNMENT, AND THUS, THE
QUESTION OF SUABILITY MAY BE
DETERMINED FROM ITS CHARTER. - It is not
necessary to write an extended dissertation
on whether or not the NPC performs a
governmental function with respect to the
management and operation of the Angat Dam.
It is sufficient to say that the government has
organized a private corporation, put money in
it and has allowed it to sue and be sued in any
court under its charter. (R.A. No. 6395, Sec.
FACTS:
During the height of the infamous typhoon
Kading, the NPC, acting through its plant
superintendent, Benjamin Chavez, opened or
caused to be opened simultaneously all the
three floodgates of the Angat Dam.
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ISSUE: Was the NPC performing a
governmental function with respect to the
management and operation of the Angat
Dam?
HELD:
YES. However, it is not necessary to
determine
whetherNPC
performs
a
governmental function with respect to the
management and operation of the Angat Dam.
It is sufficient to say that the government has
organized a private corporation, put money in
it and has allowed itself to sue and be sued in
any court under its charter. As a government
owned and controlled corporation, it has
personality of its own, distinct and separate
from that of the government. Moreover, the
charter provision that the NPC can sue and be
sued in any court is without qualification on
the cause of action as the one instituted by
the petitioners.
BUREAU OF PRINTING VS. BUREAU OF
PRINTING EMPLOYEES ASSOCIATION
1 SCRA 340 (1961)
CASE
DOCTRINE:
GOVERNMENTAL
ENTITIES,
THOUGH
INCEDENTALLY
PERFORMING PROPRIETARY FUNCTIONS,
ARE ENTITLED TO STATE IMMUNITY. - The
Bureau of Printing is an office of the
Government created by the Administrative
Code of 1916 (Act No. 2657). As such
instrumentality of the Government, it
operates under the direct supervision of the
Executive Secretary, Office of the President,
and is "charged with the execution of all
printing and binding, including work
incidental to those processes, required by the
National Government and such other work of
the same character as said Bureau may, by
law or by order of the (Secretary of Finance)
Executive Secretary, be authorized to
undertake . . .." (Sec. 1644, Rev. Adm. Code.) It
has no corporate existence, and its
appropriations are provided for in the
General Appropriations Act. Designed to meet
the printing needs of the Government, it is
primarily a service bureau and is obviously,
not engaged in business or occupation for
pecuniary profit.
Indeed, as an office of the Government,
without any corporate or juridical personality,
the Bureau of Printing cannot be sued. (Sec. 1,
Rule 3, Rules of Court.) Any suit, action or
proceeding against it, if it were to produce
any effect, would actually be a suit, action or
proceeding against the Government itself, and
the rule is settled that the Government cannot
be sued without its consent, much less over
its objection. (See Metran vs. Paredes, 45 Off.
Gaz., 2835; Angat River Irrigation System, et
al. vs. Angat River Workers' Union, et al., G.R.
Nos. L-10943-44, December 28, 1957).
It is true, as stated in the order complained of,
that the Bureau of Printing receives outside
jobs and that many of its employees are paid
for overtime work on regular working days
and on holidays, but these facts do not justify
the conclusion that its functions are
"exclusively proprietary in nature." Overtime
work in the Bureau of Printing is done only
when the interest of the service so requires
(sec. 566, Rev. Adm. Code). As a matter of
administrative
policy,
the
overtime
compensation may be paid, but such payment
is discretionary with the head of the Bureau
depending upon its current appropriations, so
that it cannot be the basis for holding that the
functions of said Bureau are wholly
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SAN BEDA COLLEGE OF LAW 2017
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proprietary in character. Anent the additional
work it executes for private persons, we find
that such work is done upon request, as
distinguished from those solicited, and only
"as the requirements of Government work
will permit" (sec. 1654, Rev. Adm. Code), and
"upon terms fixed by the Director of Printing,
with the approval of the Department Head"
(sec. 1665, id.). As shown by the
uncontradicted evidence of the petitioners,
most of these works consist of orders for
greeting cards during Christmas from
government officials, and for printing of
checks of private banking institutions. On
those greeting cards, the Government seal, of
which only the Bureau of Printing is
authorized to use, is embossed, and on the
bank checks, only the Bureau of Printing can
print the reproduction of the official
documentary stamps appearing thereon. The
volume of private jobs done, in comparison
with government jobs, is only one-half of 1
percent, and in computing the costs for work
done for private parties, the Bureau does not
include profit, because it is not allowed to
make any. Clearly, while the Bureau of
Printing is allowed to undertake private
printing jobs, it cannot be pretended that it is
thereby an industrial or business concern.
The additional work it executes for private
parties is merely incidental to its function,
and although such work may be deemed
proprietary in character, there is no showing
that the employees performing said
proprietary function are separate and distinct
from those employed in its general
governmental functions.
BUREAU OF PRINTING VS. BUREAU OF
PRINTING EMPLOYEES ASSOCIATION
FACTS:
Bureau of Printing Employees Association
filed a case against herein petitioners Bureau
of Printing, Serafin Salvador, and Mariano
Ledesma. The complaint alleged that Salvador
and Ledesma have been engaging in unfair
labor practices by interfering with, or
coercing the employees of the Bureau of
Printing, particularly the members of the
complaining association, in the exercise of
their right to self-organization, and by
discriminating in regard to hiring and tenure
of their employment in order to discourage
them from pursuing their union activities.
Answering the complaint, Salvador and
Ledesma denied the charges, and contended
that the Bureau of Printing has no juridical
personality to sue and be sued.
ISSUE: Can the Bureau of Printing be sued?
HELD:
NO. As a government office, without any
juridical capacity, it cannot be sued. The
Bureau of Printing is an instrumentality of the
government; it operates under the direct
supervision of the Executive Secretary. It is
designed to meet the printing needs of the
government. It is primarily service bureau. It
is obviously not engaged in business or
occupation for pecuniary profit. It has no
corporate existence. Its appropriations are
provided for in the budget. It is not subject to
the jurisdiction of the Court of Industrial
Relations.
Any suit, action or proceeding against the
Bureau of Printing would actually be a suit,
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SAN BEDA COLLEGE OF LAW 2017
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action or proceeding against the government
itself. The government cannot be sued
without its consent, much less over its
objection.
MOBIL PHILS. EXPLORATION, INC. VS.
CUSTOMS ARRASTRE SERVICE
18 SCRA 1120 (1966)
CASE
DOCTRINE:
PROPRIETARY
FUNCTIONS
NECESSARY
TO
THE
GOVERNMENTAL PURPOSES OF THE
GOVERNMENT ENTITY ARE COVERED BY
THE DOCTRINE OF STATE IMMUNITY. - The
situation here is not materially different. The
Bureau of Customs, to repeat, is part of the
Department of Finance (Sec. 81, Rev. Adm.
Code), with no personality of its own apart
from that of the national government. Its
primary function is governmental, that of
assessing and collecting lawful revenues from
imported articles and all other tariff and
customs duties, fees, charges, fines and
penalties (Sec. 602, R. A. 1937). To this
function, arrastre service is a necessary
incident. For practical reasons said revenues
and customs duties can not be assessed and
collected by simply receiving the importer's
or ship agent's or consignee's declaration of
merchandise being imported and imposing
the duty provided in the Tariff law. Customs
authorities and officers must see to it that the
declaration tallies with the merchandise
actually landed. And this checking up requires
that the landed merchandise be hauled from
the ship's side to a suitable place in the
customs premises to enable said customs
officers to make it, that is, it requires arrastre
operation.
Clearly, therefore, although said arrastre
function may be deemed proprietary, it is a
necessary incident of the primary and
governmental function of the Bureau of
Customs, so that engaging in the same does
not necessarily render said Bureau liable to
suit. For otherwise, it could not perform its
governmental function without necessarily
exposing itself to suit. Sovereign immunity,
granted as to the end, should not be denied as
to the necessary means to that end.
MOBIL PHILS. EXPLORATION, INC. VS.
CUSTOMS ARRASTRE SERVICE
FACTS:
Four cases of rotary drill parts were shipped
from abroad consigned to Mobil Philippines.
The Customs Arrastre later delivered to the
broker of the consignee three cases only of
the shipment. Mobil Philippines Exploration
Inc. filed suit in the CFI against the Customs
Arrastre Service and the Bureau of Customs
to recover the value of the undelivered cases
plus other damages.
The defendants filed a motion to dismiss the
complaint on the ground that not being a
person under the law, defendants cannot be
sued. After the plaintiff opposed the motion,
the court dismissed the complaint on the
ground that neither the Customs Arrastre
Service nor the Bureau of Customs is suable.
ISSUE: Can the Customs Arrastre Service or
the Bureau of Customs be sued?
HELD:
NO. The Bureau of Customs, acting as part of
the machinery of the national government in
the operations of arrastre service, pursuant to
express legislative mandate and a necessary
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incident of its prime governmental function,
is immune from suit, there being no statute to
the contrary.
The Bureau of Customs has no personality of
its own apart from that of the government. Its
primary function is governmental, that of
assessing and collecting lawful revenues from
imported articles and all other tariff and
customs duties, fees, charges, fines, and
penalties.
To this function, arrastre is a necessary
incident. Although said arrastre function is
deemed proprietary, it is necessarily an
incident of the primary and governmental
function of the Bureau of Customs, so that
engaging in the same does not necessarily
render said Bureau liable to suit. For
otherwise, it could not perform its
governmental function without necessarily
exposing itself to suit. Sovereign immunity
granted as to the end should not be denied as
to the necessary means to that end.
Mobil Phils. Case: not suable
Character Test- Why?
BOC cannot perform services with arrastre
- indispensable = immune – government
cannot perform its services if no arrastre
-
Mobil Philippines Exploration v.
Customs Arrastre Service, 18 SCRA
1120, it was held that the Customs
Arrastre Service is merely an adjunct
of the Bureau of Customs. A suit
against it is, therefore, a suit against
the
Bureau
of
Customs,
an
unincorporated agency performing
primarily governmental functions.
[NOTE: Even in the exercise of
proprietary functions incidental to its
primarily governmental functions, an
unincorporated agency still cannot be
sued without its consent.]
-
But in Department of Agriculture v.
NLRC, 227 SCRA 693, because of the
express consent contained in Act No.
3038
(where
the
Philippine
Government “consents and submits to
be sued upon any money claim
involving liability arising from
contract, express or implied, which
could serve as a basis of civil action
between private parties”), the
Department of Agriculture could be
sued on the contract for security
services entered into by it (subject to
prior filing of the claim with the
Commission on Audit), despite it
being an unincorporated agency
performing primarily governmental
functions.
If proprietary:
suit will lie because when the State engages in
principally proprietary functions, then it
descends to the level of a private individual,
and may, therefore, be vulnerable to suit. See:
National Airports Corporation v. Teodoro, 91
Phil. 207; Civil Aeronautics Administration v.
Court of Appeals, 167 SCRA 28.
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CIVIL AERONAUTICS ADMINISTRATION VS
COURT OF APPEALS
167 SCRA 28 (1988)
CASE DOCTRINE: THE DOCTRINE OF STATE
IMMUNITY DOES NOT APPLY TO
GOVERNMENT OWNED AND CONTROLLED
CORPORATIONS. - This doctrine has been
reaffirmed in the recent case of Malong v.
Philippine National Railways [G.R. No. L49930, August 7, 1985, 138 SCRA 63], where
it was held that the Philippine National
Railways, although owned and operated by
the government, was not immune from suit as
it does not exercise sovereign but purely
proprietary
and
business
functions.
Accordingly, as the CAA was created to
undertake the management of airport
operations
which
primarily
involve
proprietary functions, it cannot avail of the
immunity from suit accorded to government
agencies performing strictly governmental
functions.
CIVIL AERONAUTICS ADMINISTRATION
VS COURT OF APPEALS
FACTS:
Ernest Simke went to Manila International
Airport to meet his future son-in-law. While
walking towards the viewing deck or the
terrace to get a better view of the incoming
passengers, he slipped over an elevation
about four inches high, and he fell on his back
and broke his thigh bone. He filed an action
for damages based on quasi-delict with the
CFI of Rizal against the Civil Aeronautics
Administration or CAA as the entity
empowered to administer, operate, manage,
control, maintain, and develop the MIA.
Judgment was rendered in his favor, and on
appeal to the Court of Appeals, judgment was
affirmed.
ISSUE: Whether the CAA, being an agency of
the government, can be made a party
defendant?
HELD:
YES. Not all government entities whether
corporate or not are immune from suits.
Immunity from suits is determined by the
character of the objects for which the entity
was organized. The CAA is not immune from
suit it being engaged in functions pertaining
to a private entity.
It is engaged in an enterprise which, far from
being the exclusive prerogative of the state,
may more than the construction of public
roads, be undertaken by private concerns.
The CAA was created not to maintain a
necessity of the government, but to run what
is essentially a business even if the revenues
be not its prime objective but rather the
promotion of travel and the convenience of
the traveling public.
AIR TRANSPORTATION ADMINISTRATION
VS SPOUSES DAVID
GR 159402 February 23, 2011
CASE DOCTRINE: Sovereign Immunity;
expropriation. The doctrine of sovereign
immunity cannot be successfully invoked to
defeat a valid claim for compensation arising
from the taking without just compensation
and without the proper expropriation
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proceedings being first resorted to of the
plaintiffs’ property. The SC cited the previous
case of De los Santos v. Intermediate Appellate
Court where it ruled that the doctrine of
sovereign immunity was not an instrument
for perpetrating any injustice on a citizen. In
exercising the right of eminent domain, the
State exercised its jus imperii, as
distinguished from its proprietary rights, or
jus gestionis; yet, even in that area, where
private property had been taken in
expropriation without just compensation
being paid, the defense of immunity from suit
could not be set up by the State against an
action for payment by the owners.
or incidental to such function; it has not been
upheld in favor of the latter whose function
was not in pursuit of a necessary function of
government but was essentially a business. In
this case, the juridical character of the Air
Transportation Office (“ATO”) as an agency of
the Government was not performing a purely
governmental or sovereign function, but was
instead involved in the management and
maintenance of the Loakan Airport, an
activity that was not the exclusive prerogative
of the State in its sovereign capacity. Hence,
the ATO had no claim to the State’s immunity
from suit.
Sovereign Immunity; sovereign function and
proprietary function. The immunity from suit
is based on the political truism that the State,
as a sovereign, can do no wrong. Practical
considerations dictate the establishment of
immunity from suit in favor of the State.
Otherwise, and the State is suable at the
instance of
every other individual,
government service may be severely
obstructed and public safety endangered
because of the number of suits that the State
has to defend against. An unincorporated
government agency without any separate
juridical personality of its own enjoys
immunity from suit because it is invested
with an inherent power of sovereignty.
Accordingly, a claim for damages against the
agency cannot prosper; otherwise, the
doctrine of sovereign immunity is violated.
However, the need to distinguish between an
unincorporated
government
agency
performing governmental function and one
performing proprietary functions has arisen.
The immunity has been upheld in favor of the
former because its function is governmental
AIR
TRANSPORTATION
ADMINISTRATION VS SPOUSES DAVID
FACTS
Sps. Ramos discovered that a portion of their
land (somewhere in Baguio) was being used
as part of the runway and running shoulder of
the Loakan Airport which is operated by ATO.
Sometime in 1995, respondents agreed to
convey the subject portion by deed of sale to
ATO in consideration of the amount of
Php778,150.00. However, ATO failed to pay
despite repeated verbal and written demands.
Thus, an action for collection against ATO was
filed by the respondents before the RTC.
ATO’s primary contention was that the deed
of sale was entered into the performance of
governmental functions. RTC ruled in favor of
the respondents. CA affirmed RTC. Hence, the
petition.
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ISSUE:
Whether ATO could be sued without the
State’s consent.
RULING:
SC dismissed the petition for lack of merit.
The State’s immunity from suit does not
extend to the petitioner (ATO) because it is an
agency of the State engaged in an enterprise
that is far from being the State’s exclusive
prerogative. The CA thereby correctly
appreciated the juridical character of the ATO
as an agency of the Government not
performing a purely governmental or
sovereign function, but was instead involved
in the management and maintenance of the
Loakan Airport, an activity that was not the
exclusive prerogative of the State in its
sovereign capacity. Hence, the ATO had no
claim to the State’s immunity from suit. The
SC further observes that the doctrine of
sovereign immunity cannot be successfully
invoked to defeat a valid claim for
compensation arising from the taking without
just compensation and without the proper
expropriation proceedings being first
resorted to of the plaintiff’s property.
Lastly, the issue of whether or not the ATO
could be sued without the States consent has
been rendered moot by the passage of
Republic Act No. 9497, otherwise known as
the Civil Aviation Authority Act of 2008. R.A.
No. 9497 abolished the ATO and u nder its
Transitory Provisions, R.A. No. 9497
established in place of the ATO the Civil
Aviation Authority of the Philippines (CAAP),
which thereby assumed all of the ATOs
powers, duties and rights, assets, real and
personal properties, funds, and revenues.
Section 23 of R.A. No. 9497 enumerates the
corporate powers vested in the CAAP,
including the power to sue and be sued, to
enter into contracts of every class, kind and
description, to construct, acquire, own, hold,
operate, maintain, administer and lease
personal and real properties, and to settle,
under such terms and conditions most
advantageous to it, any claim by or against it.
With the CAAP having legally succeeded the
ATO pursuant to R.A. No. 9497, the
obligations that the ATO had incurred by
virtue of the deed of sale with the Ramos
spouses might now be enforced against the
CAAP.
MUN. OF SAN FERNANDO, LA UNION VS.
JUDGE FIRME
195 SCRA 692 (1991)
CASE DOCTRINE: THE SUABILITY OF
MUNICIPAL
CORPORATIONS
IS
DETERMINED THROUGH THEIR CHARTER.
- Municipal corporations, for example, like
provinces and cities, are agencies of the State
when they are engaged in governmental
functions and therefore should enjoy the
sovereign immunity from suit. Nevertheless,
they are subject to suit even in the
performance of such functions because their
charter provided that they can sue and be
sued. (Cruz, Philippine Political Law, 1987
Edition, p. 39)
A distinction should first be made between
suability and liability. "Suability depends on
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the consent of the state to be sued, liability on
the applicable law and the established facts.
The circumstance that a state is suable does
not necessarily mean that it is liable; on the
other hand, it can never be held liable if it
does not first consent to be sued. Liability is
not conceded by the mere fact that the state
has allowed itself to be sued. When the state
does waive its sovereign immunity, it is only
giving the plaintiff the chance to prove, if it
can, that the defendant is liable." (United
States of America v. Guinto, supra, p. 659660).
Anent the issue of whether or not the
municipality is liable for the torts committed
by its employee, the test of liability of the
municipality depends on whether or not the
driver, acting in behalf of the municipality, is
performing governmental or proprietary
functions. As emphasized in the case of Torio
v. Fontanilla (G.R. No. L- 29993, October 23,
1978. 85 SCRA 599, 606), the distinction of
powers becomes important for purposes of
determining the liability of the municipality
for the acts of its agents which result in an
injury to third persons.
MUN. OF SAN FERNANDO, LA UNION VS.
JUDGE FIRME
FACTS:
Petitioner Municipality of San Fernando, La
Union, is a municipality corporation.
Respondent Judge Romeo N. Firme is
impleaded in his official capacity as the
presiding judge, while private
respondents are heirs of the deceased
Laureano Banina, Sr. On December 16, 1965,
a collision occurred involving a passenger
jeep, a gravel and sand truck, and a dump
truck of the Municipality of San Fernando, La
Union which was driven by Alfredo Bislig.
Due to the impact, several passengers of the
jeep including Banina, Sr. died. The heir of
Banina, Sr. instituted a complaint for damages
against the owner and driver of the passenger
jeep. However, the aforesaid defendant filed a
third party complaint against the petitioner
and the driver of the dump truck of the
petitioner.
Thereafter, the private respondents amended
the complaint wherein the petitioner and its
regular employee Alfredo Bislig were
impleaded for the first time as defendants.
Petitioner filed its answer and raised
affirmative defenses such as lack of cause of
action, non-suability of the state, prescription
of cause of action, and the negligence of the
owner and driver of the passenger jeep as the
proximate cause of the collision.
On October 10, 1979, the trial court rendered
a decision for the plaintiffs, and defendants
Municipality of san Fernando, La Union and
Alfredo Bislig are ordered to pay jointly and
severally the plaintiffs. The complaint against
the driver and the owner of the passenger
jeep was dismissed. Petitioner filed a motion
for reconsideration and for a new trial.
However, respondent judge issued another
order denying the motion for reconsideration
of the order for having been filed out of time.
Hence, this petition.
ISSUE: Whether the municipality is liable for
the tort committed by its employee?
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HELD:
NO. The test of liability of the municipality
depends on whether or not the driver acting
in behalf of the municipality is performing
governmental or proprietary functions. It has
already been remarked that municipal
corporations are suable because their
charters grant them the
competence to sue and be sued. Nevertheless,
they are generally not liable for torts
committed by them in the discharge of
governmental functions and can be held
answerable only if it can be shown that they
were acting in a proprietary capacity. In
permitting such entities to be sued, the state
merely gives the claimants the right to show
the defendant was not acting in its
governmental capacity when the injury was
inflicted or that the case comes under the
exceptions recognized by law. Failing this, the
claimants cannot recover.
In the case at bar, the driver of the dump
truck of the municipality insists that he was
on his way to Naguilan River to get a load of
sand and gravel for the repair of the San
Fernando municipal street. In the absence of
any evidence to the contrary, the regularity of
the performance of official duty is presumed.
Hence, the driver of the dump truck was
performing duties or tasks pertaining to his
office. After careful examination of existing
laws and jurisprudence, we arrive at the
conclusion that the municipality cannot be
held liable for the torts committed by its
regular employee, who was then engaged in
the discharge of governmental functions.
Hence, the death of the passenger, tragic and
deplorable though, it may be imposed on the
municipality no duty to pay the monetary
compensation.
ARE
LOCAL
GOVERNMENT
UNIT
UNINCORPORATED OR INCORPORATED?
Case of Municipality of San Fernando:
-
-
determine character of agent to
determine the liability of “special
agent”
Determine if he’s acting within scope
of functions
Difference
of
unincorporated
&
incorporated
Are incorporated agencies entitled to
invoke DSI?
- Supposing Charter is silent? Same as
Unincorporated Agency – determine
fr. >original charter (NOT Applicable)
➢ Corporation Code
Supposing inc. agency was incorporated
under the Corporation Code & its AOI is silent
as to its suability: With power to sue and be
Sued
Since incorporated government
agencies have a separate personality, should
they not have the rights accorded to the
government? --- Can we not say that since
they are separate & distinct, DSI should not
apply to them?
SUITS AGAINST GOVERNMENT AGENCIES
Incorporated: If the charter provides that
the agency can sue and be sued, then suit will
lie, including one for tort. The provision in the
charter constitutes express consent on the
part of the State to be sued. See: PNB v. CIR, 81
SCRA 314; Rayo v. CFI of Bulacan, 110 SCRA
460; SSS v. Court of Appeals, 120 SCRA 707.
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Municipal corporations are agencies of the
State when they are engaged in governmental
functions and, therefore, should enjoy the
sovereign immunity from suit. However, they
are subject to suit even in the performance of
such functions because their respective
charters provide that they can sue and be
sued [Municipality of San Fernando, La Union
v. Judge Firme, 195 SCRA 692].
One of the corporate powers of local
government units, as enumerated in Sec. 22,
Local Government Code, is the power to sue
and be sued.
In National Irrigation Administration v. Court
of Appeals, 214 SCRA 35, the Supreme Court
reiterated that NIAis a corporate body
performing proprietary functions, whose
charter, P.D. 552, provides that it may sue and
be sued.
iii) In Philippine National Railways v.
Intermediate Appellate Court, 217 SCRA 401, it
was held that although the charter of PNR is
silent on whether it may sue or be sued, it had
already been ruled in Malong v. PNR, 185
SCRA 63, that the PNR “is not performing any
governmental function” and may, therefore,
be sued.
Unincorporated: Inquire
functions of the agency:
into
principal
If governmental: NO suit without consent
[Sanders v. Veridiano, supra.; Bureau of
Printing v. Bureau of Printing Employees
Association, 1 SCRA 340]. In the Veterans
Manpower case, the Court said that the PC
Chief and PC-SUSIA are instrumentalities of
the national government exercising primarily
governmental functions (regulating the
organization and operation of private
detective, watchmen or security guard
agencies), and thus may not be sued without
consent. In Farolan v. Court of Tax Appeals,
217 SCRA 298, the Supreme Court said that
the Bureau of Customs, being an
unincorporated agency without a separate
juridical personality, enjoys immunity from
suit. It is invested with an inherent power of
sovereignty, namely the power of taxation; it
performs governmental functions. In
MUNICIPALITY OF SAN MIGUEL, BULACAN
VS. FERNANDEZ
130 SCRA 56 (1984)
CASE DOCTRINE: FUNDS OF THE
MUNICIPAL CORPORATIONS ARE EXEMPT
FROM EXECUTION. - In Tantoco vs.
Municipal Council of Iloilo, 49 Phil. 52, it was
held that "it is the settled doctrine of the law
that not only the public property but also the
taxes and public revenues of such
corporations cannot be seized under
execution against them, either in the treasury
or when in transit to it. Judgments rendered
for taxes, and the proceeds of such judgments
in the hands of officers of the law, are not
subject to execution unless so declared by
statute.
Thus, it is clear that all the funds of petitioner
municipality in the possession of the
Municipal Treasurer of San Miguel, as well as
those in the possession of the Provincial
Treasurer of Bulacan, are also public funds
and as such they are exempt from execution.
Besides, there must be, pursuant to Section
2(a) of Presidential Decree No. 477, known as
"The Decree on Local Fiscal Administration,"
a corresponding appropriation in the form of
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SAN BEDA COLLEGE OF LAW 2017
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an ordinance duly passed by the Sangguniang
Bayan before any money of the municipality
may be paid out. In the case at bar, it has not
been shown that the Sangguniang Bayan has
passed an ordinance to this effect.
Furthermore, the procedure outlined by
Section 15, Rule 39 of the New Rules of Court
has not been followed.
MUNICIPALITY OF SAN
BULACAN VS. FERNANDEZ
MIGUEL,
FACTS:
In Civil Case No. 604-B, the then CFI of
Bulacan rendered judgment holding herein
petitioner municipality liable to respondents
Imperio, et al. When the judgment became
final, respondent judge issued a writ of
execution to satisfy the same. Petitioner
municipality filed a motion to quash the writ
on the ground that the municipality’s
property or funds are public exempt from
execution. The motion was denied. The
respondent judge issued another order
requiring both the municipal and provincial
treasurer to comply with the money
judgment. When the treasurers failed to do so,
respondent judge issued an order for their
arrestand that they will be released upon
compliance, hence the present petition.
ISSUE:
Whether the funds of the municipality in the
hands of the Provincial and Municipal
Treasurers of Bulacan and San Miguel,
respectively are public funds which are
exempt from execution?
HELD:
YES. Municipal funds in possession of
municipal and provincial treasurers are
public funds exempt from execution. The
reason for those was explained in the case of
Municipality of Paoay vs. Manaois‘ that are
held in trust for the people intended and used
for the accomplices of the purposes for which
municipal corporations are created and that
to subject said properties and public funds to
execution would materially impede, even
defeat and in some instance destroy said
purpose.” Thus it is clear that all the funds of
petitioner municipality in the possession of
the
Municipal Treasurer of San Miguel as well as
those in the possession of the Provincial
Treasurer of Bulacan are also public funds
and as such they are exempt from execution.
Besides PD 447, known as the Decree on
Local Fiscal Administration, provides in
section 3 (a) that “no money shall be paid out
of the treasury except in pursuance of a
lawful appropriation or other specific
statutory authority.” Otherwise stated, there
must be a corresponding appropriation in the
form of an ordinance duly passed by the
Sangguniang Bayan before any money of the
municipality may be paid out. In the case at
bar, it has not been shown that the
Sangguniang Bayan has passed any ordinance
to this effect.
MUNICIPALITY OF MAKATI VS. COURT OF
APPEALS
190 SCRA 206 (1990)
CASE DOCTRINE: REMEDY TO ENFORCE
THE LIABILITY OF THE MUNICIPAL
CORPORATION - There is merit in this
contention. The funds deposited in the second
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PNB Account No. S/A 263-530850-7 are
public funds of the municipal government. In
this jurisdiction, well-settled is the rule that
public funds are not subject to levy and
execution, unless otherwise provided for by
statute [Republic v. Palacio, supra.; The
Commissioner of Public Highways v. San
Diego, G.R. No. L-30098, February 18, 1970,
31 SCRA 616]. More particularly, the
properties of a municipality, whether real or
personal, which are necessary for public use
cannot be attached and sold at execution sale
to satisfy a money judgment against the
municipality. Municipal revenues derived
from taxes, licenses and market fees, and
which are intended primarily and exclusively
for the purpose of financing the governmental
activities and functions of the municipality,
are exempt from execution [See Viuda De Tan
Toco v. The Municipal Council of Iloilo, 49 Phil.
52 (1926);
The Municipality of Paoay, Ilocos Norte v.
Manaois, 86 Phil. 629 (1950); Municipality of
San Miguel, Bulacan v. Fernandez, G.R. No.
61744, June 25, 1984, 130 SCRA 56]. The
foregoing rule finds application in the case at
bar. Absent a showing that the municipal
council of Makati has passed an ordinance
appropriating from its public funds an
amount corresponding to the balance due
under the RTC decision dated June 4, 1987,
less the sum of P99,743.94 deposited in
Account No. S/A 265- 537154-3, no levy
under execution may be validly effected on
the public funds of petitioner deposited in
Account No. S/A 263-530850-7.
Nevertheless, this is not to say that private
respondent and PSB are left with no legal
recourse. Where a municipality fails or
refuses, without justifiable reason, to effect
payment of a final money judgment rendered
against it, the claimant may avail of the
remedy of mandamus in order to compel the
enactment and approval of the necessary
appropriation
ordinance,
and
the
corresponding disbursement of municipal
funds therefor [See Viuda De Tan Toco v. The
Municipal Council of Iloilo, supra; Baldivia v.
Lota, 107 Phil. 1099 (1960); Yuviengco v.
Gonzales, 108 Phil. 247 (1960)].
MUNICIPALITY OF MAKATI VS. COURT
OF APPEALS
FACTS:
An expropriation proceeding was initiated by
petitioner Municipality of Makati against
private
respondent
Admiral
Finance
Creditors Consortium Inc., Home Building
System and Reality Corp., and Arceli P. Jo
involving a parcel of land and improvements
thereon located
at San Antonio Village, Makati. An action for
eminent domain was filed. Attached to the
petitioner’s complaint was a certification that
a bank account had been opened with the
PNB. After the decision has become final and
executory, a writ of execution was issued and
a notice of garnishment was served upon the
manager of PNB where the petitioner had
bank accounts.
However, the sheriff was informed that a hold
code was placed on the account of the
petitioner.
The petitioner contended that its funds at the
PNB cocked neither be garnished nor levied
upon execution for to do so would result in
the disbursement of public funds without the
proper appropriation required under the law.
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In a petition with the Court of Appeals,
petitioner alleges for the first time that it has
actually two accounts with the PNB, one
exclusively for the expropriation of the
subject property with the outstanding
balance of P99, 743. 94. The other account
was for the obligations and other purposes of
the municipal government with a balance of
P170,098,421.72.
ISSUE: Whether the bank account of a
municipality may be levied on execution to
satisfy a money judgment against it absent
showing that the municipal council has
passed an ordinance appropriating from its
public funds an amount corresponding to the
balance due to the RTC decision?
HELD:
YES. Since the first PNB account was
specifically
opened
for
expropriation
proceedings it has initiated over the subject
property, there is no objection to the
garnishment or levy under execution of funds
therein amounting to P4,965,506.40, the
funds garnished in excess of P99,743.94,
which are public funds earmarked for the
municipal government. Other statutory
obligations are exempted from execution
without the proper appropriation required
under the law.
The funds deposited in the 2nd PNB account
are public funds of the municipal government.
The rule is well-settled that public funds are
not subject to levy and execution, unless
otherwise provided by the statute. More
particularly, the properties of a municipality,
whether real or personal, which are
necessary for public use cannot be attached
and sold on execution sale to satisfy a money
judgment against the municipality. Municipal
revenues derived from taxes, licenses and
market fees, and which are intended
primarily and exclusively for the purpose of
financing governmental activities and
functions of the municipality are exempt from
execution. The foregoing rule finds
application in the case at bar.
This is not to say that private respondents are
left with no legal recourse. When a
municipality fails or refuses without
justifiable reason to effect payment of a final
money judgment rendered against it, the
claimant may avail of the remedy of
mandamus in order to compel the enactment
and approval of the necessary appropriation
ordinance
and
the
corresponding
disbursement of municipal funds. The court
will not condone petitioner’s blatant refusal
to settle its obligation arising from an
expropriation proceeding it has in fact
initiated. Within the context of the state’s
inherent power of eminent domain, just
compensation means not only the correct
determination of the amount to be paid to the
owner of the land but also the payment of the
land within a reasonable time from its taking.
The state’s power of eminent domain should
be exercised within
the bounds of fair play and justice. In the case
at bar, considering that
valuable property has been taken, the
compensation to be paid is fixed,
and the municipal has had more than
reasonable time to pay full
compensation.
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Bank Accounts (Municipality of Makati
case)
- Personal funds are still with the
treasury in favor of the employee; No
writ of execution = Doctrine of State
Immunity
CITY OF CALOOCAN VS. ALLARDE
G.R. NO. 107271; SEPTEMBER 10, 2003
CASE DOCTRINE: GOVERNMENT FUNDS
APPROPRIATED FOR A PURPOSE MAY BE
GARNISHED TO SATISFY THAT PURPOSE. However, the rule is not absolute and admits
of a well- defined exception, that is, when
there is a corresponding appropriation as
required by law. Otherwise stated, the rule on
the immunity of public funds from seizure or
garnishment does not apply where the funds
sought to be levied under execution are
already allocated by law specifically for the
satisfaction of the money judgment against
the government. In such a case, the monetary
judgment may be legally enforced by judicial
processes.
Thus, in the similar case of Pasay City
Government, et al. vs. CFI of Manila, Br. X, et
al., where petitioners challenged the trial
court's order garnishing its funds in payment
of the contract price for the construction of
the City Hall, we ruled that, while government
funds deposited in the PNB are exempt from
execution or garnishment, this rule does not
apply if an ordinance has already been
enacted for the payment of the City's
obligations —
Upon the issuance of the writ of execution,
the petitioner-appellants moved for its
quashal alleging among other things the
exemption of the government from execution.
This move on the part of petitionerappellants is at first glance laudable for 'all
government funds deposited with the
Philippine National Bank by any agency or
instrumentality of the government, whether
by way of general or special deposit, remain
government funds and may not be subject to
garnishment or levy.' But inasmuch as an
ordinance has already been enacted expressly
appropriating the amount of P613,096.00 as
payment to the respondent-appellee, then the
herein case is covered by the exception to the
general rule
CITY OF CALOOCAN VS. ALLARDE
FACTS:
In 1972, Mayor Marcial Samson of Caloocan
abolished the position of Assistant City
Administrator and 17 other positions via
Ordinance No. 1749. The affected employees
assailed the legality of the abolition. The CFI
in 1973 declared abolition illegal and ordered
the reinstatement of all the dismissed
employees and the payment of their backwages and other emoluments. The City
Government appealed the decision but such
was dismissed. In 1986 the City paid Santiago
P75,083.37 as partial payment of her backwages. The others were paid in full. In 1987
the City appropriated funds for her unpaid
back salaries (supplemental budget #3) but
the City refused to release the money to
Santiago. The City of Caloocan argued that
Santiago was not entitled to back wages. On
July 27, 1992 Sheriff Castillo levied and sold
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at public auction one of the motor vehicles of
the City Government for P100,000.
The amount was given to Santiago. The City
Government questioned the validity of the
sale of motor vehicle; properties of the
municipality were exempt from execution.
Judge Allarde denied the motion and directed
the sheriff to levy and schedule at public
auction 3 more vehicles. On October 5, 1993
the City Council of Caloocan passed Ordinance
No. 0134 which included the amount of
P439,377.14 claimed by Santiago as backwages, plus interest. Judge Allarde issued an
order to the City Treasurer to release the
check but the City Treasurer can’t do so
because the Mayor refuses to sign the check.
On May 7, 1993. Judge Allarde ordered the
Sheriff to immediately garnish the funds of
the
City
Government
of
Caloocan
corresponding to the claim of Santiago. Notice
of garnishment was forwarded to the PNB but
the City Treasurer sent an advice letter to
PNB that the garnishment was illegal and that
it would hold PNB liable for any damages
which may be caused by the withholding the
funds of the city.
ISSUE:
Whether or not the funds of City of Caloocan,
in PNB, maymbe garnished (i.e. exempt from
execution), to satisfy Santiago’s claim.
HELD:
Garnishment is considered specie of
attachment by means of which the plaintiff
seeks to subject to his claim property of the
defendant in the hands of a third person, or
money owed by such third person or
garnishee to the defendant. The rule is and
has always been that all government funds
deposited in the PNB or any other official
depositary of the Philippine Government by
any of its agencies or instrumentalities,
whether by general or special deposit, remain
government funds and may not be subject to
garnishment or levy, in the absence of a
corresponding appropriation as required by
law. Even though the rule as to immunity of a
state from suit is relaxed, the power of the
courts ends when the judgment is rendered.
Although the liability of the state has been
judicially ascertained, the state is at liberty to
determine for itself whether to pay the
judgment or not, and execution cannot issue
on a judgment against the state. Such statutes
do not authorize a seizure of state property to
satisfy judgments recovered, and only convey
an implication that the legislature will
recognize such judgment as final and make
provision for the satisfaction thereof.
However, the rule is not absolute and admits
of a well-defined exception, that is, when
there is a corresponding appropriation as
required by law. In such a case, the monetary
judgment may be legally enforced by judicial
processes. Herein, the City Council of
Caloocan already approved and passed
Ordinance No. 0134, Series of 1992, allocating
the amount of P439,377.14 for Santiago’s
back-wages plus interest. This case, thus, fell
squarely within the exception. The judgment
of the trial court could then be validly
enforced against such funds.
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ADDED RECITS:
WHAT IS THE DIFFERENCE BETWEEN
UNINCORPORATED and INCORPORATED
AGENCY?
- Incorporated agency --- we refer to
charter
- Unincorporated Agency – Inquire in to
the functions
EXAMPLE: BUREAU OF PRINTING:
Determine the primary function of the
unincorporated agency
MANDAMUS: To compel the enactment of
ordinance.
IS MANDAMUS APPLICABLE AGAINST
CONGRESS?
- No. because it will violate the
separation of powers.
WHAT IF A GOCC IS INCORPORATED
UNDER THE CORPORATION CODE BUT ITS
AOI DOES NOT PROVIDE THAT IT CAN BE
SUED, CAN THE GOCC BE SUED?
- Yes. We apply the Corporation Code;
It is still an entity with a personality
separate and distinct from the
government.
- Municipal Corporations – Section 22,
LGC
that he or she had exhibited involvement in or
can be imputed with knowledge of the
violations, or had failed to exercise necessary
and reasonable diligence in conducting the
necessary investigations required under the
rules. The Court also stresses that rule that
the presidential immunity from suit exists
only in concurrence with the president’s
incumbency. [Rodriguez v. Macapagal Arroyo,
G.R. No. 191805, November 15, 2011, citing
Estrada v. Desierto, G.R. Nos. 146710-15,
146738, March 2, 2001, 353 SCRA 452] 16
Presidential Immunity - The President,
during his tenure of office or actual
incumbency, may not be sued in any civil or
criminal case, and there is no need to provide
for it in the Constitution or law. [Rubrico v.
Arroyo, G.R. No. 183871, February 18, 2010]
ADDITIONAL:
FROM ALBANO:
ALBANO:
REMINDERS FROM SARMIENTO:
Commander-in-Chief - Pursuant to the
doctrine of command responsibility, the
President, as the Commander-in-Chief of the
AFP, can be held liable for affront against the
petitioner’s rights to life, liberty and security
as long as substantial evidence exist to show
IMMUNITY OF THE STATE FROM SUIT
Q: Is there any Constitutional provision
forbidding any suit against the State?
A: YES. The constitution expressly states that
the State cannot be sued without its consent.
(Sec.3, Art. XV1, 1987 Constitution).
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Q: How may consent of the State to be sued
given?
A: The consent of the State to be sued may be
given expressly or impliedly. There is express
consent, when it gives it by way of a general
law. (Act No. 3083; C.A. No. 327, as amended
by P.D. No. 1445; Arts. 2180, 2189, NCC, or by
special law).
There is implied consent when it files a suit or
when it enters into a contract in the exercise
of its proprietary capacity. (United States of
America v. Ruiz, 138 SCRA 487).
Q: Who gives the consent to be sued?
A: It is Congress by way of a law that gives the
State’s consent to be sued. The law may be a
general statute or a special law.
Q: May the consent to be sued be given by
a lawyer of an unincorporated agency of
the State?
A: No, because the consent to be effective,
must be given by the State through a duly
enacted statute, the consent given by the
lawyer of the unincorporated agency of the
State is not binding upon it as he is
considered to have gone beyond the scope of
his authority. (Republic v. Purisima, 78 SCRA
470).
Q: State and discuss the basis of the
doctrine of State immunity from suit.
A: It is based on the provisions of the
Constitution that the State may not be sued
without its consent. The doctrine reflects
nothing less than a recognition of the
sovereign character of the State and an
express affirmation of the unwritten rule
effectively insulating it from the jurisdiction
of courts. It is based on the very essence of
sovereignty. Justice Holmes once said that a
sovereign is exempt from suit, not because of
any formal conception or obsolete theory, but
on the logical and practical ground that there
can be no legal right as against the authority
that makes the law on which the right
depends. True, the doctrine, not too
infrequently, is derisively called “the royal
prerogative of dishonesty” because it grants
the prerogative to defeat any legitimate claim
against it by simply invoking its non-suability.
It has been explained in its defense, however,
that a continued adherence to the doctrine of
non-suability cannot be deplored, for the loss
of governmental efficiency and the obstacle to
the performance of its multifarious functions
would be far greater in severity than the
inconvenience that may be caused private
parties, if such fundamental principle is to be
abandoned and the availability of judicial
remedy is not to be accordingly restricted.
(Department of Agriculture v. NRLC, 227
SCRA 693; Professional Video, Inc. v. TESDA,
G.R. No. 155504, June 26, 2009).
Q: Is the rule absolute that the State may
not be sued at all? How may consent of the
State to be sued given? Explain.
A: No. The rule is not really absolute for it
does not say that the state may not be sued
under any circumstances. On the contrary, the
doctrine only conveys, “the state may not be
sued without its consent;” its clear import
then is that the State may at times be sued.
The State’s consent may be given either
expressly or impliedly. Express consent may
be made through a general law (i.e.,
Commonwealth act no. 327, as amended by
presidential decree no. 1445 [sections 49-50],
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which requires that all money claims against
the government must first be filed with the
Commission on Audit which must act upon it
within 60 days. Rejection of the claim will
authorize the claimant to elevate the matter
to the Supreme Court on certiorari and in,
effect, sue the State thereby) or a special law.
In this jurisdiction, the general law waiving
the immunity of the state from suit is found in
Act no. 3083, where the Philippine
government “consents and submits to be sued
upon any money claim involving liability
arising from contract, express or implied,
which could serve as a basis of civil action
between the private parties.”
Implied consent, on the other hand, is
conceded when the State itself commences
litigation, thus opening itself to a
counterclaim or when it enters into a contract.
In this situation, the government is deemed to
have descended to the level of the other
contracting party and to have divested itself
of its sovereign immunity. The rule is not,
however, without qualification. Not all
contracts entered into by the government
operate as a waiver of its non-suability;
distinction must still be made between one
which is executed in the exercise of its
sovereign function and another which is done
in its proprietary capacity. (Department of
Agriculture v. NLRC, 227 SCRA 293).
government has been adjudged liable in a suit
to which it has consented, it does not
necessarily follow that the judgment can be
enforced by execution against its funds for, as
held in Republic v. Villasor (54 SCRA 84),
every disbursement of public funds shall be
covered by a corresponding appropriation
passed by the Legislature.
Q: What does it mean when the State gives
its consent to be sued? Explain.
A: When the state consents to be sued, it does
not necessarily concede its liability. By
consenting to be sued, it waives immunity
from suit, but it does not waive its lawful
defenses to the action. (Meritt v. Government,
31 SCRA 311, 318). Even when the
Q: Is there any distinction between
suability and liability of the State? Explain.
A: Yes. Suability depends on the consent of
the State to be sued, liability on the applicable
law and the established facts. The
circumstance that a State is suable does not
necessarily mean that it is liable, on the other
hand, it can never be held liable if it does not
Q: When the State files a suit, it waives its
right against immunity from suit. Is the
rule absolute? Why?
A: As a rule, when the sate files a suit, it
becomes vulnerable to suits or counterclaims.
(Froctan v. Pan Oriental Shipping. L-6060.
Sept. 30, 1950). But not if the State intervenes
in a suit not for the purpose of resisting the
claim precisely because of State immunity.
(Lim v. Brownwell, 107 Phil. 345)
Q: In a complaint against the State, the
plaintiff failed to allege the existence of
State’s consent. Give the effect of such
failure to allege State’s consent to be sued?
A: It is a rule that the complaint must allege
that the State gave its consent to be sued,
otherwise, it would be dismissed. This is so
because waiver of the immunity being in
derogation of sovereignty will not be inferred
lightly and must be construed strictissimi juris.
(Republic v. Feliciano, 148 SCRA 424).
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first consent to be sued. Liability is not
conceded by the mere fact that the state has
allowed itself to be sued. When the state does
waive its sovereign immunity, it is only giving
the plaintiff the chance to prove, if it can, that
the defendant is liable.
Q: Does the doctrine of state immunity
from suit extend to foreign states?
A: Yes. Consistent with recognized principles
of international law, adopted under the
Constitution as part of the law of the land, a
foreign state or government may not be sued
in the courts of another state or its won
courts without its consent. (Syquia v. Almeda)
Q: A piece of real property was acquired
by the Holy See by way of donation from
the Archdiocese of Manila. The purpose
was the construction of the official place of
residence of the Papal Nuncio. Such right
to acquire was recognized in the 1961
Vienna
Convention
on
Diplomatic
Relations. It was, however, sold to another.
The Holy See was sued through its
representative Msgr. Crilos, Jr. for failure
to comply with the condition to evict the
squatters. It was contended, however, that
t cannot invoke immunity from suit since
it entered into a commercial transaction.
Rule on the contention.
A: The contention is not correct. The Holy See
is immune from suit because the decision to
transfer property was clothed with a
governmental character, as it did not do it for
profit or gain. The mere entering into a
contract by a foreign State with a private
party cannot be the determining factor
whether it is engaged in business or not. If the
foreign State is not engaged regularly in
business or trade, the particular act or
transaction must betested by its nature. If the
act is in pursuit of a sovereig activity, or an
accident thereof, it is an act jure imperii,
especially when it is not undertaken for gain
or profit. If it is bought and sold in the
ordinary course of a real estate business, then
it is jure gestionis. (Holy See v. Judge Rosario,
Jr., et al., 57 SCAD 92. G.R. No. 101949, Dec.1,
1994).
Q: North Luzon Railways Corp. (North-rail)
and China National Machinery &
Equipment
Corp.
entered
into
a
Memorandum of Agreement for the
construction of the railway system from
Caloocan City to Malolos, Bulacan.
Eximbank and the Department of Finance
enetered into a loan agreement to finance
the project as the Chinese government
designated bank as the lender. Atty. Harry
Roque et al. filed a petition seeking to
nullify the contract lleging that it violated
the Constitution and RA 9184, otherwise
known as the Government Procurement
Act. CNMEC contended that it cannot be
sued since it was an agent of the People’s
Republic
of China,
performing
a
governmental function. Is the contention
correct?
A: NO, it is performing proprietary activity.
The desire of the CNMEG to secure the
Nothrail Project was in the ordinary or
regular course of its business as a global
construction company. The implemenation of
the Northrail project was intended to
generate profit for CNMEG, with the contract
agreement placing a contract price of USD
421,050,000 for the venture. The use of the
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term “state corporation” to refer to CNMEG
was only descriptive of its nature as a GOCC,
and it was acting on behalf of China in the
performance of the latter’s sovereign
functions. To imply otherwise would result in
an absurd situation, in which all Chinese
corporations owned by the state would be
automatically considered as performing
governmental activities, even if they are
clearly engaged in commercial or proprietary
pursuits. (China National Machinery &
Equipment Corp. v. Hon. Sta. Maria, et al. G.R.
No. 185572, February 7, 2012).
Q: When it was sued, it offered a
Certification executed by the economic &
Commercial Office of thePeople’s Republic
of China, stating that the Northrail project
was in pursuit of a sovereign activity. Such
Certification endorsed by the OGCC and
the OSG sufficient? Why?
A: No. the determination by the OSG and
OGCC does not inspire the same degree of
confidence as a DFA certification which can
even be inquired as to its intrinsic correctness.
Q: What department of the government
determines whether a foreign state is
entitled to immunity from suit and what is
the nature of such determination?
A: The executive department is the branch
that is empowered to determine whether a
foreign state is entitled to immunity from suit.
The determination of the executive arm of the
government that a state or instrumentality is
entitled to sovereign or diplomatic immunity
is a political question that is conclusive upon
the courts. (Interational catholic migration
commission v. Calleja, 190 SCRA 130). Where
the plea of immunity is recognized and
affirmed by the executive branch, it is the
duty of the courts to accept this claim so as
not to embarrass the executive arm of the
government in conducting the country’s
foreign relations.
Q: The International Rice Research
Institute (IRRI) dismissed Ernesto Callado
for driving an institute vehicle while
under the influence of liquor, etc. he filed
an action for illegal dismissal, illegal
suspension and indemnity pay with the
NLRC. The arbiter ruled in his favor
holding that in all cases of termination, the
Institute waived its immunity. On appeal
to the NLRC, the arbiter’s order was
reversed, hence, a petition to the SC was
filed where the contention was that the
immunity granted to IRRI under sec.3, P.D.
No. 1620 was waived in a Memorandum
dated April 13, 1991. Decide.
A: The contention is not proper. Mere
implementing rules could not waive the
immunity. The grant of immunity to IRRI is
clear and unequivocal and an express waiver
by its Director-General is the only way by
which it may relinquish or abandon this
immunity. )Callado v. IRRI, 61 SCAD 204, G.R.
No. 106483, May 22, 1995)
Q: What is the raison d’etre for immunity
of international organizations or foreign
states?
A: The raison d’etre for these immunities is
the assurance of unimpeded performance of
their functions by the agencies concerned. In
Callado v. IRRI 61 SCAD 204, it was said:
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“The grant of immunity from local jurisdiction
to xxx and IRRI is clearly necessitated by their
international character and respective
purposes. The objective is to avoid the danger
of partiality and interference by the host
country in their international workings. The
exercise of jurisdiction by the Department of
Labor in these instances would defeat the
affairs of international organizations, in
accordance with international practice, from
political pressure or control by the host
country to the prejudice of member States of
the organization, and to ensure the
unhampered performance of their functions.”
Q: What do you call the process done
whenever a foreign state is sued and
pleads its immunity form suit? How is it
done?
A: It is called the process of suggestion.
In the United States, the procedure followed
is the process of “suggestion,” where the
foreign State or the international organization
sued in an American court requests the
Secretary of State to make a determination as
to whether it is entitled to immunity. If the
Secretary of State finds that the defendant is
immune from suit, he, in turn, asks the
Atttorney General to submit to the court a
“suggestion” that the defendant is entitled to
immunity. In England, a similar procedure is
followed, only the Foreign Affairs Office
issues a certification to that effect instead of
submitting a “suggestion.”
In the Philippines, the practice is for the
foreign government or the international
organization to first secure an executive
endorsement of its claim of sovereign or
diplomatic immunity. But how the Philippine
Foreign
Affairs
Office
conveys
its
endorsement to the courts varies.
Q: Is the Vatican City a State?
A: Yes. The Vatican City first fell into none of
the established categories of States, and the
attribution to it of “sovereignty” must be
made in a sense different from that in which it
is applied to other States. In a community of
national states, the Vatican City has an
independent government of its own, with the
Pope, who is also headof the Roman Catholic
Church, as the Holy See or Head of State, in
conformity with its traditions, and the
demands of its mission in the world. Indeed,
the worldwide interests and activities of the
Vatican City are such as to make it in a sense
an “international State.”
Q: Are there conflicting concepts of
sovereignty? Explain?
A: Yes, and these are the classical or absolute
theory and restrictive theory. According to
the classical or absolute theory, a sovereign
cannot, without its consent, be made a
respondent in the courts of another sovereign.
According to the newer or restrictive theory,
the immunity of the sovereign is recognized
only with regard to public acts or acts jure
imperii of a State, but not with regard to
private acts or acts jure gestionis. (US .v Ruiz
136 SCRA 487 [1987].
Q:Give examples of laws where the State
has given its consent to b sued.
A: 1.Act No. 3083 which provides that:
“Subject to the provisions of this Act, the
government hereby consents and submits
itself to be sued upon moneyed claims
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involving liability arising from contracts,
express or implied which could serve as basis
of civil action between private.”
2.CA No. 327 as amended by P.D. 1445, Secs.
49-50 which state that:
“Any claim against the government must
first be filed with the Commission on Audit
which must act on it within 60 days. Appeal
may be made to the Supreme Court on
certiorari.”
3.Art.2189, Civil Code which provides that:
“Provinces, cities, or municipalities shall be
liable for damages for the death of, or injuries
suffered by any person by reason of the
defective condition of roads, streets, bridges,
public buildings and other public works
under their control or supervision.”
4.Art.2180, Civil Code which states that:
“The State is responsible in like manner
when it acts through a special agent.”
Q: Petitioners sued the Philippine National
Railways for damages for the death of
their son who fell from an overloaded
train belonging to the PNR sometime on
October 30, 1977. The Trial Court
dismissed the suit on the ground that the
charter of the PNR, as amended by PD 741
has made the same a government
instrumentality, and thus, immune from
suit.
The dismissal is not proper. The correct rule,
the Supreme Court said, is that not all
government entities whether corporate or
non-corporate, are immune from suits.
Immunity from suit is determined by the
character of the objects for which the entity is
organized. (National Airport Corp. v.
Teodoro). When the government enters into a
commercial business, it abandons its
sovereign capacity and is to be treated like
any other corporation. In this case, the State
divested itself of its sovereign capacity when
it organized the PNR which is no different
from its predecessors, the Manila Railroad
Company. (Malong v. PNR)
Q: May NIA be liable for damages for the
injuries sustained by the crops of the
private respondents due to the inundation
of their landholdings? It was contended
that NIA is immune from suit for quasidelict or tort and assuming NIA could be
sued, it is not liable for tort since it did not
act through a special agent as required
under paragraph 6, Article 2180 of the
Civil Code. Decide.
NIA is in error. It is not immune from suit by
virtue of the express provision of P.D. No. 552.
Under its charter (R.A No. 3601, as amended),
it has the power to exercise all the powers of
a corporation under the Corporation Law. It
may sue and be sued. NIA is a government
agency with a juridical personality separate
and distinct from the government. It is not a
mere agency of the government but a
corporate body performing proprietary
functions. (Fontanilla v. Maliaman)
Q: The petitioner filed a suit for specific
performance with damages against
respondent (formerly Reparations Com.)
praying for the replacement of a defective
rock pulverizing machinery with a new
one, or in the alternative, replace the same.
The respondent denied responsibility for
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damages contending that the same was
inspected by reputable companies under
the Reparations Law. The RTC ruled for
the petitioner and issued an order of
execution pending appeal. The CA set
aside the order, hence, this petition.
The issue raised is whether the funds of
REPACOM in the account of the Board of
Liquidators in the Philippine National
Bank may be garnished to satisfy a money
judgment against the BOARD. Decide.
No, because the suit against REPACOM was a
suit against the State.
The Board of Liquidators is a government
agency under the direct supervision of the
President of the Republic created by E.O. 372,
dated Nov. 24, 1950. Pursuant to P.D. Nos.
629 and 635-A, it is tasked with the specific
duty of administering the assets and paying
the liabilities of the defunct REPACOM. It was
not created for profit nor to engage in
business. Hence, a government agency which
is unincorporated possesses no juridical
personality of its own, the suit against it
becomes a suit against the agency’s principal,
i.e., the State.
The sale of the rock pulverizing plant to
PHILROCK by the Board of Liquidators,
although proprietary in nature was merely
incidental to the performance of the Board’s
primary and governmental function of
settling and closing the affairs of the
REPACOM. Hence, its funds in the Philippine
National Bank are public funds which are
exempt from garnishment. The SC so ruled in
Commission of Public Highways v. San Diego.
“All government funds deposited with
PNB by any agency or instrumentality of the
government, whether by way of general or
special deposit, remain government funds
since such government agencies or
instrumentalities do not have any non-public
or private funds of their own. They are not
subject to garnishment or levy. Even
assuming that the funds become commingled
with other funds of the banks, this does not
remove the character of the fund as a credit
representing government funds, thus
deposited.” (See Philrock, Inc. v. Board of
Liquidators)
Q:NMPC and PSI represented by Romeo
Jalosjos borrowed money from Traders
Royal Bank in the sum of P2.5M through a
standby letter of credit, the amount of
which was used to guarantee the payment
of the coverage of the right to broadcast
the 1981 PBA Season with condition that
collections from the sponsors should be
deposited with Traders. NMPC and PSI did
not deposit the collections, hence Traders
filed a collection case against NMPC and
PSI. The OSG filed a Motion to Dismiss
invoking immunity of State from suit. The
agency, it was contended, is performing
governmental functions. It was denied on
the ground that the State may be sued if it
entered into a contract. Decide.
The agency was organized to disseminate
governmental information to assist in the
hastening of the slow economic development
of the country. When it entered into a
contract of loan to facilitate the broadcast of
the 1981 basketball season, it was engaged in
an undertaking which was not incidental to
disseminating governmental information. It
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“It is not the Strongest of species that survives…nor the most intelligent that survives, it is the
one that is most adaptable to CHANGE.”
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DILANGALEN, BAI DONNA | DOMINGO, KEVIN[ DAGUIO, ROY ]
MALONZO, ANNA MARGARITA | GAMMAD, GREGG | TUNGOL, REGINA | DULAY, DEUS | GOZON, GLADSY
Page | 68
SAN BEDA COLLEGE OF LAW 2017
MENDIOLA, MANILA
was engaged in a business undertaking which
was certainly beyond its function of
disseminating governmental information.
The doctrine of State immunity from suit may
not ve invoked as a shield in the same manner
that it cannot serve as an instrument in
perpetrating an injustice. (Traders Royal
Bank vs. IAC)
Q: In G.R. No. 76607, several officers of the
U.S Air Force were sued in connection with
the bidding conducted for the contracts for
barbering services in said base. The
bidding was won by Dizon, but it was
questioned by private respondents asking
for the cancellation of the award and for
the rebidding for the barbershop
concessions. A complaint was filed to that
effect. Petitioners filed a Motion to Dismiss
invoking immunity of State from suit.
In G.R. No. 79470, Fabian Genove filed a
complaint for damages against petitioners
for his dismissal as cook at the U.S. Air
Force Recreation Center at the John Hay
Air Station in Baguio City. It was
ascertained that Genove had poured urine
into the soup stock used in cooking the
vegetables served to the club customers.
In G.R. No. 80018, Luis Bautista, an
employee of the barracks in Camp O’
Donnell was arrested following a buy-bust
operation conducted by the petitioners. As,
a consequence, he was removed.
In G.R. No. 80258, a complaint for damages
was filed against petitioners for injuries
suffered by respondents. According to the
plaintiffs, they were beaten, handcuffed by
the defendants, and dogs unleashed on
them which bit them in several parts of
their bodies. The defendants denied this
but instead contended that the plaintiffs
were bitten by the dogs when they
resisted arrest for theft.
In their Motions to Dismiss, the
defendants said that the suit against them
is a suit against the USA. The Motion to
Dismiss was denied, hence, this petition.
Decide, stating you reasons.
The rule that a State may not be sued without
its consent, now expressed in Section 3,
Article XVI of the 1987 Constitution is one of
the generally accepted principles of
international law adopted as part of the law
of the land under Article II, Section 2. This
latter provision merely reiterates a policy
earlier embodied in the 1935 and 1973
Constitutions and also intended to manifest
our resolve to abide by the rules of the
international community.
Even without such affirmation, we would still
be bound by the generally accepted principles
of international law under the doctrine of
incorporation. Under this doctrine, as
accepted by the majority of States, such
principles are deemed incorporated in the
law of every civilized State as a condition and
consequence of its membership in the society
of nations. Upon its admission to such society,
the State is automatically obligated to comply
with these principles in its relations with
other States.
As applied to the local State, the doctrine of
State immunity is essential to the justification
given by Justice Holmes that “there can be no
COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM
“It is not the Strongest of species that survives…nor the most intelligent that survives, it is the
one that is most adaptable to CHANGE.”
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DILANGALEN, BAI DONNA | DOMINGO, KEVIN[ DAGUIO, ROY ]
MALONZO, ANNA MARGARITA | GAMMAD, GREGG | TUNGOL, REGINA | DULAY, DEUS | GOZON, GLADSY
Page | 69
SAN BEDA COLLEGE OF LAW 2017
MENDIOLA, MANILA
legal rights as against the authority which
makes the law on which the right depends.”
There are other practical reasons for the
enforcement of the doctrine. In the case of the
foreign State sought to be impleaded in the
local jurisdiction, the added inhibition is
expressed in the maxim par in parem, non
habet imperium. All States as sovereign equals
cannot assert jurisdiction over another. A
contrary disposition would, in the language of
a celebrated case, “unduly vex the peace of
nations.”
While the doctrine appears to prohibit only
suits against the State without its consent, it
is also applicable to complaints filed against
officials of the State for acts allegedly
performed by them in the discharge of their
duties. The rule is that, if the judgment
against such officials will require the State
itself to perform an affirmative act to satisfy
the same, such as the appropriation of the
amount needed to pay the damages awarded
against them, the suit must be regarded as
against the State itself although it has not
been formally impleaded. In such a situation,
the State may move to dismiss the complaint
on the ground that it has been filed without
its consent.
In connection with GR No. 80018, the
petitioners were acting in the exercise of their
official functions when they conducted the
buy-bust operation against the complainant
and thereafter testified against him at his trial.
The said petitioners were in fact connected
with the Air Force Office as Special
Investigators and were charged precisely
with the functions of preventing the
distribution, possession and use of prohibited
drugs and prosecuting those guilty of such
acts. It cannot for a moment be imagined that
they were acting in their private or unofficial
capacity when they were apprehended and
later testified against the complainant. It
follows that for discharging their duties as
agents of the United States, they cannot be
directly impleaded for acts imputable to their
principal which has not given its consent to
be sued. As observed in Sanders vs.
Veridiano:
“Given the official character of the
above-described letters, we have to conclude
that the petitioners were, legally speaking,
being sued as officers of the United States
government. As they have acted on behalf of
that government, and within the scope of
their authority, it is that government, and
within the scope of their authority, it is that
government, and not the petitioners
personally, that is responsible for their acts.”
In G.R. No. 79470, the restaurant service
cannot be considered as a governmental
function, hence, the doctrine of State
immunity from suit cannot be invoked. The
restaurant service partakes of the nature of
the business enterprise undertaken by the
USA in its proprietary capacity. The services
were not exclusive to the servicemen, they
were not also for free. Tourists could avail of
the same.
As regards GR No. 76607, the barber shops
subject of the concessions are commercial
enterprise operated by private persons. They
are not agencies of the USA, hence, the
doctrine of State immunity cannot be invoked.
(USA vs. Guinto)
COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM
“It is not the Strongest of species that survives…nor the most intelligent that survives, it is the
one that is most adaptable to CHANGE.”
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DILANGALEN, BAI DONNA | DOMINGO, KEVIN[ DAGUIO, ROY ]
MALONZO, ANNA MARGARITA | GAMMAD, GREGG | TUNGOL, REGINA | DULAY, DEUS | GOZON, GLADSY
Page | 70
SAN BEDA COLLEGE OF LAW 2017
MENDIOLA, MANILA
COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM
“It is not the Strongest of species that survives…nor the most intelligent that survives, it is the
one that is most adaptable to CHANGE.”
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DILANGALEN, BAI DONNA | DOMINGO, KEVIN[ DAGUIO, ROY ]
MALONZO, ANNA MARGARITA | GAMMAD, GREGG | TUNGOL, REGINA | DULAY, DEUS | GOZON, GLADSY
Page | 71